14 hours ago
2
David Jagielski, CPA, The Motley Fool
Tue, May 5, 2026 astatine 8:50 AM CDT 3 min read
Microsoft (NASDAQ: MSFT) and different tech giants are investing heavy successful artificial quality (AI) these days, and the large interest is that those budgets proceed rising. There person already been concerns that AI investments won't wage off, and higher-than-expected investments lone exacerbate those worries.
When Microsoft reported net past week, its banal didn't surge. It wasn't due to the fact that the institution fell abbreviated of expectations. In fact, its maturation complaint was amended than what analysts expected. Instead, the banal appeared to autumn owed to a important summation successful its forecast for capex this year.
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Microsoft projects capex volition full $190 cardinal for the twelvemonth
The tech elephantine has been investing aggressively successful AI owed to the opportunities to heighten its products and services successful that area. And for 2026, it present expects its full capex to beryllium $190 cardinal -- that's a 61% summation from the erstwhile year. That's besides astir 23% higher than what analysts were expecting ($154.6 billion). The occupation is that the outgo of representation has been surging owed to inflated request successful the tech sector. The institution alluded to that connected its net call, with Amy Hood, the company's main fiscal officer, saying that $25 cardinal of that walk was owed to "higher constituent pricing."
News of the higher-than-expected capex fund overshadowed what should person different been a stellar 4th for Microsoft. The company's results were beardown and came successful amended than what analysts expected for some gross and net per share. Unfortunately, with the marketplace focused heavy connected capex these days, that was apt a cardinal crushed the tech banal didn't rally pursuing the merchandise of its net numbers.
Why I wouldn't beryllium disquieted astir Microsoft's banal
Heighted representation prices whitethorn beryllium putting a dent successful Microsoft's spending plans this year, but that's a impermanent problem. As proviso catches up to demand, representation prices should inevitably travel down successful the future; it's truly conscionable a substance of erstwhile that happens. And much importantly, with Microsoft having an abundance of bundle and tech products that tin payment from AI, it's much apt to payment and nett from AI investments than different tech companies. High capex should beryllium little of a interest for maturation investors erstwhile it comes to Microsoft.
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