News about MSFT

According to Reuters citing The Telegraph, Microsoft (MSFT) has withdrawn from an AI data center in Loughton, Essex that Nscale was building for it, though no reason was given. Grid officials reportedly told Nscale power would not be available until the 2030s, and Nscale says it remains committed to the site and is exploring other power sources. The site was planned to house about 23,000 Nvidia chips, roughly 11.5% of a program of about 200,000 chips. Meanwhile, Microsoft's cash capex in the June quarter reached $35.80 billion, more than double the year-earlier figure. The article argues the problem is grid timing rather than AI demand, and Microsoft reports results on October 28.

AI stocks have had a rough time as investors question whether heavy data center spending will pay off, but Microsoft is bucking the trend, with shares up around 8% over the past month. Azure cloud revenue topped $100 billion for the first time, up 41% from a year earlier, and management expects Azure revenue to rise 45% in fiscal 2027, showing that Microsoft's roughly $175 billion in capital spending this year is paying off. The new Copilot desktop app, which helps users code and completes some tasks autonomously, had 30 million paid subscribers before its launch, a 50% jump in just a few months. The article also argues that the company's enterprise strength and AI focus position it well for the long term, and notes its trailing P/E of 27 is below the tech sector average of 33.