{"id":439714,"date":"2026-01-29T00:15:07","date_gmt":"2026-01-29T00:15:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/439714\/"},"modified":"2026-01-29T00:15:07","modified_gmt":"2026-01-29T00:15:07","slug":"microsoft-shares-fall-as-rising-spending-slight-cloud-beat-fan-ai-payoff-worries","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/439714\/","title":{"rendered":"Microsoft shares fall as rising spending, slight cloud beat fan AI payoff worries"},"content":{"rendered":"

Microsoft\u2019s MSFT-Q<\/a> capital expenditures hit a record high in the latest quarter, the company said on Wednesday, while sales slightly beat Wall Street expectations, raising concerns among investors who had expected a major payoff from massive spending on artificial intelligence including a cloud megadeal with OpenAI.<\/p>\n

Microsoft\u2019s shares tumbled 6.5 per cent in extended trading.<\/p>\n

The tech giant said revenue at its Azure cloud division grew 39 per cent in the October-December period, its fiscal second quarter. That just squeaked past a consensus estimate of 38.8 per cent, according to Visible Alpha.<\/p>\n

The Windows maker has long enjoyed a first-mover advantage in Big Tech\u2019s AI race thanks to its early bet on OpenAI, whose technology powers most of its offerings, including M365 Copilot.<\/p>\n

Microsoft owns a 27 per cent stake in the ChatGPT maker, whose recapitalization effort last year helped push Microsoft\u2019s overall earnings upward after a change in how Microsoft accounts for its stake.<\/p>\n

But a strong reception for Google\u2019s latest Gemini model and the launch of autonomous agents, such as Anthropic\u2019s Claude Cowork, have posed risks both to Microsoft\u2019s AI business and the software offerings that have long been central to the company.<\/p>\n

\u201cMicrosoft\u2019s stock sentiment is very much heavily levered towards how OpenAI is doing and I think that\u2019s a bit uncontrollable from a Microsoft standpoint, at least right now with the ChatGPT model versus Gemini,\u201d said Ryuta Makino, research analyst at Gabelli Funds.<\/p>\n

For the current fiscal third quarter, Microsoft forecast Azure revenue growth of 37 per cent to 38 per cent, versus analyst estimates of 36.41 per cent, according to data from Visible Alpha. The company forecast overall sales in a range with a midpoint of US$81.2-billion, in line with analyst estimates of US$81.19-billion, according to LSEG data.<\/p>\n

Chief Financial Officer Amy Hood said capital expenditures will be slightly lower than in the just-completed quarter but noted that over time, the rising cost of memory chips will start to weigh on Microsoft\u2019s cloud computing margins.<\/p>\n

Competition has weighed on Microsoft\u2019s stock as investor doubts persist over whether Big Tech will deliver enough returns to make up for the AI spending. Collectively, Microsoft, Alphabet, Meta and Amazon are expected to spend more than US$500-billion on AI this year.<\/p>\n

In the reported quarter, Microsoft\u2019s capital spending totalled US$37.5-billion, a jump of nearly 66 per cent from last year and with about two-thirds of the spending going toward computing chips. That was more than market estimates of US$34.31-billion, according to Visible Alpha.<\/p>\n

Total revenue rose 17 per cent to US$81.3-billion in the second quarter, while analysts expected US$80.27-billion, based on estimates compiled by LSEG.<\/p>\n

Microsoft said the contracted backlog in its cloud business more than doubled to US$625-billion. The figure was above the US$523-billion reported by cloud rival Oracle in December.<\/p>\n

But roughly 45 per cent of Microsoft\u2019s remaining performance obligation was driven by OpenAI alone, underscoring its reliance on the startup, which has pledged around US$1.4 trillion in overall AI expenditure with few details on how it plans to fund the spending.<\/p>\n

Microsoft said that excluding OpenAI, its cloud backlog grew at 28 per cent, even when including a US$30-billion deal with Claude-maker Anthropic. Late October\u2019s major OpenAI restructuring gave Microsoft that stake. And while the overhaul included a commitment from OpenAI to buy US$250-billion of Azure services, it also freed the ChatGPT creator to pursue cloud deals with other companies that could lower its reliance on Microsoft.<\/p>\n","protected":false},"excerpt":{"rendered":"Microsoft\u2019s MSFT-Q capital expenditures hit a record high in the latest quarter, the company said on Wednesday, while…\n","protected":false},"author":2,"featured_media":439715,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,901,276,277,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-439714","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alberta","tag-artificial-intelligence","tag-artificialintelligence","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/439714","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=439714"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/439714\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/439715"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=439714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=439714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=439714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}