Microsoft's PC Sales Slump Amid Rising Component Costs
Microsoft's PC sales are experiencing a significant slump, according to the company's recent earnings call. Windows OEM and devices revenue declined 7% year-over-year in the fourth quarter, with CFO Amy Hood attributing this decline to weaker PC market demand, rising component costs, and elevated channel inventory.
The same trend is expected to continue in fiscal 2027, with Hood guiding Windows OEM and devices revenue to decline in the high teens for the full year. This decline is also attributed to rising component costs pushing up device prices, making it less likely for customers to upgrade their existing hardware.
However, Microsoft's data center business is thriving, with the company adding 31 new data centers during the quarter and bringing its total capacity to 88. CEO Satya Nadella stated that Microsoft expects to roughly double its overall data center capacity within two years.