Microsoft reports $190 billion in planned capex for AI infrastructure, up 60% year-over-year, as cloud growth offsets gaming struggles.
Microsoft shares have fallen over 30% from their October high, pressured by rising AI-related capital expenditures and sluggish gaming performance. The company expects $190 billion in capex for the current fiscal year, a 60% increase from last year, driven by AI infrastructure investments.
Despite the challenges, Microsoft’s last quarter saw an 18% year-over-year revenue increase, with its intelligent cloud division growing 30%. Azure, its AI-powered platform, led the gains, while productivity software sales rose 17%. Analysts remain divided on whether the spending will pay off.
CEO Satya Nadella is reportedly considering a spin-off of the Xbox unit as the gaming segment underperforms. Meanwhile, Copilot, Microsoft’s AI chatbot, has yet to gain significant market traction.