Microsoft Hikes Dividend Amid Record CapEx

Microsoft Corp. (MSFT) has announced an 8% dividend hike, marking its 23rd consecutive year of dividend increases. The quarterly payout will be 98 cents per share, starting on December 10, 2026.

The increase may raise concerns about Microsoft's capital expenditures (CapEx), which reached $41 billion in the fourth quarter of fiscal year 2026. However, CFO Amy Hood expects free cash flow to stay positive in fiscal year 2027, despite a planned $50 billion CapEx in Q1.

Analysts are cautiously optimistic about Microsoft's valuation, with a consensus price target of around $567 offering about 14% upside. However, recent price targets have been significantly higher, including Cantor Fitzgerald's increased target to $608 from $522.