Microsoft cuts capex forecast on AI capacity delays
CFO Amy Hood cited delays in third-party capacity as Wall Street scrutinizes returns on AI spending.
Microsoft has revised its 2026 capital expenditure (capex) forecast downward to $170 billion from the previously projected $175 billion, citing delays in third-party capacity for AI services. CFO Amy Hood disclosed the updated forecast during the company's fiscal first-quarter earnings call. The reduction stems from some GPU-as-a-Service contracts, utilized by Nvidia GPUs for AI operations, experiencing delays until the second half of the fiscal year.
This development raises concerns among Wall Street analysts about the returns on AI spending. Despite the revised capex forecast, Azure revenue surged 48% to over $33 billion, surpassing market expectations. Microsoft's headcount decreased by 2% during the fiscal first-quarter, while the company maintained its cloud revenue growth at 19%.
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