Key Points

  • Microsoft expects capital expenditures to exceed $30 billion this quarter, CFO Amy Hood said Wednesday, citing "continued strong demand signals."
  • The company's total revenue for the fiscal year ending June 30 was $281.7 billion, up 15% year-over-year; Hood said the company will "again deliver double-digit revenue and operating income growth" this fiscal year.
  • "Given our leadership in commercial cloud, strong demand signals for our cloud and AI products, and a large contract backlog, we will continue to invest in both capital expenditures and operating expenses to capture the broad market opportunity," Hood said on the earnings call.

Deeper Dive

Microsoft shares rose 5% on Thursday after quarterly results beat expectations, pushing the company's valuation past the $4 trillion mark, according to CNBC. The company became the second to reach that milestone after chipmaker Nvidia, which first hit $4 trillion in early July.

"If this growth persists, even with rising competitive pressure, Microsoft won't need to reconsider its massive AI-related capital expenditures, which significantly reduces associated risks," said Thomas Monteiro, senior analyst at Investing.com, in emailed comments. "In other words, the company's margin expansion while heavily investing in AI indicates it can efficiently scale into fiscal 2026 regardless of external challenges," he added.

Microsoft and other tech giants continue to make big bets on AI, while investors eagerly look for signs of returns. Meanwhile, economic uncertainty stemming from President Donald Trump's erratic tariff measures has added extra pressure on big tech companies.

In the third quarter of fiscal 2025, which ended March 31, Microsoft's capital expenditures (including finance leases) totaled $21.4 billion. Hood said on the earnings call in late April that the figure was "slightly below expectations due to normal variability in the timing of data center lease deliveries." At that time, Hood had said Microsoft expected capital expenditure growth to slow in the next fiscal year starting in July, after the company confirmed scaling back some AI data center projects.

Hood said Wednesday that capital expenditures in the most recent quarter were $24.2 billion. She reiterated her view from earlier this year that capital expenditure growth in the current fiscal year would moderate. "Due to the timing of deliveries of new capacity in the first half, including large finance lease sites, we expect higher growth rates in the first half than in the second half," the CFO said.