Microsoft’s capital expenditures are set to soar to $190 billion in 2026 due to rising memory costs driven by AI demand. The company anticipates a significant increase from its current spending levels.
As of early Tuesday, Microsoft reported better-than-expected quarterly results. Earnings per share reached $4.27, surpassing the expected $4.06.
Revenue for the quarter totaled $82.89 billion, compared to the anticipated $81.39 billion. This marks an impressive 18% growth year over year.
Net income also showed a strong increase, reaching $31.78 billion, up from $25.82 billion in the same quarter last year. Microsoft’s finance chief, Amy Hood, noted this growth reflects ongoing demand.
Key statistics from the earnings report:
- Fiscal third-quarter capital expenditures rose to $31.9 billion, a 49% increase.
- The forecast for fiscal fourth-quarter revenue is between $86.7 billion and $87.8 billion.
- Azure cloud growth is expected between 39% and 40% at constant currency.
- The Visible Alpha consensus predicted capital expenditures of $154.6 billion.
Hood indicated that higher component prices could impact Microsoft by around $25 billion. This increase in capital spending is largely driven by investments in AI-related technologies, including partnerships with OpenAI.
Despite these promising figures, uncertainties remain regarding future memory prices and their potential impact on overall expenses. No specific timeline has been shared about how these changes will unfold.
