One specific indicator that has grown in significance as Microsoft investors prepare for quarterly results this month is financing leases.

A financing lease enables a business to pay for an asset over time as opposed to everything at once. Shareholders need to get used to some very large figures for businesses like Microsoft, which are constructing enormous data centres to handle workloads related to artificial intelligence.

Microsoft informed investors in July that financing leases that had not yet started had surged to $108.4 billion, up $20.6 billion from the previous quarter and almost $100 billion more than two years prior. Leases will start in the fiscal years 2025 and 2030 and last for a maximum of 20 years.

Microsoft spent $19 billion on capital projects overall during the most recent quarter. The sum, which includes assets obtained through financing leases, increased from $14 billion in the March quarter to a figure equal to Microsoft's expenditures for the whole 2020 fiscal year.

Microsoft's leasing finances will become more transparent for investors when it releases its fiscal first-quarter earnings in late October. In the last two years, executives at Microsoft and other leading tech firms have authorised larger capital expenditures, frequently to improve their generative AI performance.

Microsoft said last month that it would contribute to a fund that would support the construction of data centres and the required energy infrastructure, mostly in the United States. In order to restart a reactor at the Pennsylvanian nuclear power facility Three Mile Island, it also inked a 20-year power purchase deal.

(Sources: cnbc.com)