Microsoft's $115 Billion Bet on AI and Cloud Growth

Microsoft's capital spending has increased sharply over the past year, climbing to $115.9 billion from $64.6 billion in the same period a year earlier.

The tech giant is planning to build about 38 gigawatts of data center capacity by 2032, more than triple its current capacity.

This spending has raised concerns among investors, with one analyst pressing management on how Microsoft would protect itself if data centers and chips were being overbuilt.

Despite these concerns, management expects fiscal 2027 capital spending to grow again, and has guided down operating margins by less than a point. Free cash flow is expected to remain positive, but will be used to pay for the build-out.