Microsoft shares slide as AI spending surges
The Hindu
Microsoft on Wednesday reported a 60 percent jump in net income for the last quarter of 2025, but spending on artificial intelligence surged, rattling investors.
Microsoft on Wednesday reported a 60 percent jump in net income for the last quarter of 2025, but spending on artificial intelligence surged, rattling investors.
Shares in the cloud and software giant sank about five percent in after-hours trading, with investors keeping a close eye on capital expenditures as the company spends heavily in the AI race against rivals Google, Amazon and Meta.
The company said that capital expenditures, which largely consist of the massive build-out for AI and cloud infrastructure, grew by 66 percent to $37.5 billion.
Investors are also looking at Microsoft's ties to OpenAI, the company behind ChatGPT.
Microsoft now holds a 27 percent stake in OpenAI, which has quickly grown to become the world's most valuable private company with a $500 billion valuation, but which some feel is overspending.
Analysts expressed worry that a sizeable chunk of Microsoft's expected revenue over the coming quarters was from a financially overstretched OpenAI.
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