Microsoft’s Earnings Signal Strong Demand for Data Centers, GPUs, and Bitcoin Mining

Microsoft’s latest earnings report provides a bullish outlook for power demand, with significant implications for data centers, GPU infrastructure, and Bitcoin miners, according to Cantor analysts.

Microsoft’s Capital Expenditures: What to Expect in 2025 and 2026

The tech giant revealed that capital expenditures (capex) will rise in fiscal year 2026, but at a slower pace than in 2025. This year, Microsoft’s spending is focused on long-lived assets, particularly data center infrastructure, while 2026 capex will shift toward short-lived assets like GPUs.

Microsoft’s management acknowledged that they are currently “capacity-constrained” due to a shortage of power and space, but they expect to reach equilibrium by year-end.

Massive Data Center Expansion Continues

Over the last three years, Microsoft has more than doubled its data center capacity, with the most recent expansion being its largest to date, according to Cantor.

The company also emphasized:

• GPU Flexibility: Microsoft plans to continuously upgrade GPU hardware, avoiding commitment to a single model due to rapid technological advancements.
• Geographic Diversification: Expanding data center locations worldwide to enhance resilience and efficiency.

Impact on CoreWeave and AI Infrastructure

Cantor analysts see a positive outlook for CoreWeave (CORZ), a private AI cloud provider with a long-term contract with Microsoft. Despite concerns over DeepSeek’s AI advancements, analysts believe CoreWeave remains crucial for both Microsoft and OpenAI.

Will Microsoft Expand In-House or Lease Third-Party Data Centers?

A key question remains: Will Microsoft meet its power and infrastructure needs by expanding its own data centers, or will it rely more on third-party leasing?

If leasing plays a larger role, Cantor sees a “positive read-through for APLD”, which is developing liquid cooling infrastructure for GPUs.

Power Demand Will Keep Rising

Cantor analysts reaffirm that power demand is not slowing down. As Microsoft increases GPU investments, firms with available capacity—including IREN, GLXY, RIOT, CIFR, and HUT—stand to benefit.

(Sources: investing.com, reuters.com, ChatGPT)