Microsoft's Data Center Leases Surpass $100 Billion, Impacting MSFT Stock

Microsoft's (MSFT) latest quarterly results exceeded expectations in several key areas. One notable aspect was the significant increase in non-commenced leases, which ballooned to $329.1 billion for the quarter ended June 30, 2026, up from $196.6 billion in the prior year.

The tech giant revealed that it had parted with about $130 billion to secure data center leases, primarily for datacenters, and some of these leases are subject to certain contractual conditions being met. The terms of these leases range from one to 20 years and begin between fiscal 2027 and fiscal 2033.

A closer look at public records reveals that Microsoft has committed substantial funds to various projects, including a €695 million investment in Portugal's Start Campus, which will be dedicated to Microsoft and filled with Nvidia (NVDA) GPUs. Another significant project is the Crusoe's new 900-megawatt Abilene campus, which was announced for Microsoft in late March.

The substantial rise in non-commenced leases also led to an increase in useful life for long-lived assets like data centers and buildings from 15 years to 25 years, a move that could have implications for Microsoft's depreciation costs.