Microsoft Builds a Power Plant and Blows Past $80 Billion in Capex as Wall Street Demands AI Profits
23.06.2026 - 13:16:49 | boerse-global.de
The numbers look stellar on paper. Microsoft’s third fiscal quarter through March 2026 delivered an 18% revenue jump to $82.9 billion, Azure growth of 40%, and net income up 23% to $31.8 billion. Its AI business alone now generates over $37 billion in annual revenue, a 123% surge. Yet the stock is trading near a 52-week low, with investors questioning when all that spending will translate into fatter margins.
The answer, for now, is not yet. And the market is losing patience.
Microsoft is responding by going to extremes on the infrastructure front. In a joint venture with Chevron, the company is building a dedicated natural?gas power plant in West Texas called Project Kilby. The facility, fueled by gas from the Permian Basin, will deliver 2.67 gigawatts of electricity exclusively to a new datacenter when it comes online in 2028. Chevron has until the end of 2026 to greenlight the final investment decision, but the price tag already looks hefty at roughly $7 billion. The move effectively bypasses the regional grid, securing a captive energy source for one of the world’s most power?hungry AI clusters.
Should investors sell immediately? Or is it worth buying Microsoft?
That plant is just one line item in a capex bill that is exploding. Over the nine months to March, Microsoft poured $80.1 billion into property, plant and equipment, up from $47.5 billion a year earlier. The third quarter alone saw nearly $31 billion in new capital spending, and the full?year plan stands at a staggering $190 billion. Higher prices for graphics processors are adding to the strain, and the company’s operating cash flow of $127.5 billion over nine months is being consumed largely by these outlays.
The market’s verdict has been brutal. After Monday’s selloff that dragged Alphabet down more than 6% and Microsoft as much as 4.3%, the stock bounced 1.43% on Tuesday to €326.05. But the year?to?date loss remains around 19%. Technically, the damage is evident: the shares trade about 8% below their 50?day moving average and more than 15% below the 200?day line. From the 52?week high of €478.10 reached in late October 2025, the decline is nearly 32%. Tuesday’s recovery lifted the relative strength index to 36.8 from a deeply oversold 33 on Monday – a level that some technicians consider still bearish rather than a signal to buy.
Beyond the core AI spending story, Microsoft faces a growing list of headaches. Shareholders have filed a class?action lawsuit in Seattle, alleging the company misled investors about Copilot user numbers. On the gaming side, the Xbox division is undergoing a painful restructuring under the Project Helix hardware refresh, including layoffs. Server capacity constraints worsened after failed negotiations with Oracle, forcing temporary shortages. To hedge its bets, Microsoft is exploring an integration of Chinese AI provider DeepSeek, aiming to diversify the models powering its services rather than relying solely on OpenAI.
For now, the bulls point to the strong quarterly numbers and argue that the AI build?out will eventually pay off. Skeptics counter with a question no earnings release can yet answer: when exactly will the billions sunk into datacenters and power plants start lifting free cash flow and margins? Until that becomes clear, the stock is likely to remain under pressure, caught between a record infrastructure push and a market that wants to see results sooner.
Ad
Microsoft Stock: New Analysis - 23 June
Fresh Microsoft information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
