By Ece Yildirim
Publication Date: 2026-01-29 10:00:00
In its second-quarter earnings report on Wednesday, tech giant Microsoft reported $37.5 billion in capital expenditures, exceeding market estimates by more than a billion. The spending was up 66% from a year earlier, and roughly two-thirds of it was primarily spent on GPUs and CPUs, Microsoft executives said in an investor call.
A few months ago, a report like this would have sent (and did send) Microsoft stock soaring. But on Wednesday, it had the opposite effect, and the stock went down 7%.
As worries over an AI bubble simmer, the market is more desperate than ever to see tangible revenue returns that can reignite belief in the great financial promises of the technology, rather than just another huge spending commitment.
But accompanying Microsoft’s record spending was slowing cloud growth.
Revenue from Microsoft’s cloud services grew by 39% this quarter, down from 40% growth in the first quarter. During the investor call, Microsoft CFO Amy Hood attributed…
