Microsoft announced a new USD 40 billion share buyback today as part of an effort to return more cash to stockholders.
The tech giant, which has seen its stock stagnate in recent years, also said it was increasing its dividend by 22 per cent to 28 cents a share.
The new share buyback comes on the heels of another share repurchase plan announced in 2008, which was set to expire in September.
"These actions reflect a continued commitment to returning cash to our shareholders," said Microsoft chief financial officer Amy Hood.
The move comes with Microsoft in transition, having announced the departure of chief executive Steve Ballmer within a year.
Microsoft, which is trying to refocus the company around "devices and services" after missing the transition to mobile computing, also recently announced it was buying the mobile phone division of Nokia.
The maker of Windows software had been the undisputed leader of the tech sector for years, but recently has been overtaken in market value by Apple and Google.
Microsoft shares jumped 1.8 per cent to USD 33.40 in opening trade on Wall Street.
