Morgan Stanley analyst Keith Weiss notes that Microsoft typically announces a dividend raise in mid-September and points out that the company has raised its dividend by an average of 14% annually since the financial crises in 2009, when the dividend was unchanged.

Microsoft has underperformed the market the day after its dividend announcement in nine of the past 12 years, but Weiss believes this time may prove different as investors have higher confidence in the durability of growth at Microsoft and an increase in the dividend yield above 2% would likely attract more income oriented investors.

He sees a higher probability of an above average dividend raise in September, noting that an increase of over 20% constitutes a raise larger than "normal" and would allow the dividend yield to return to above 2% despite strong stock performance over the last year.

Weiss maintains his Overweight rating and $130 price target on Microsoft shares.