Microsoft Locks in 20-Year Gas Supply to Fuel AI Expansion as Stock Remains Stuck in a 32% Slide
Published on 06/23/2026 at 20:33 | Redaktion boerse-global.de
The gulf between Microsoft’s operational strength and its market valuation has rarely been wider. On Tuesday, the software giant inked a two-decade power purchase agreement with Chevron for a 2.67-gigawatt natural gas plant in West Texas — code-named “Project Kilby” — designed to electrify an ever-expanding fleet of data centers. The same day, German-listed shares climbed 2.33 percent to €328.95, snapping a recent losing streak but leaving the stock deep in the red for the year.
The Chevron tie?up is a logical extension of Microsoft’s infrastructure blitz. Annualised AI revenue has already surpassed $37 billion, a 123 percent surge from a year earlier, while Azure’s top line accelerated 40 percent in the latest quarter. That kind of scaling demands industrial?scale energy, and a 20?year commitment signals management’s conviction that the boom is built to last.
Cloud engine fires on all cylinders
Microsoft’s cloud segment remains the primary growth driver. The Microsoft Cloud franchise generated $54.5 billion in revenue during the quarter, up 29 percent, as enterprise clients upgrade their IT stacks to handle the heavy compute demands of modern AI models. Total group revenue rose 18 percent to just under $83 billion, pushing operating profit to $38.4 billion.
Those numbers are underwritten by a staggering $627 billion backlog of contracted revenue — a cushion that gives Microsoft unusual visibility even as it spends aggressively. Capital expenditures for the first nine months of the fiscal year ending March 2026 totalled $80.1 billion, fully funded by operating cash flow of $127.5 billion. The company is financing the build?out without taking on new debt.
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Market remains unconvinced
Yet for all the operational heft, the share price tells a different story. The equity now trades roughly 32 percent below the 52?week high struck in October 2025, and the year?to?date decline stands at between 18 and 20 percent depending on the trading venue. The relative strength index has slipped to 37.4, moving into oversold territory, while the stock continues to trade below its 200?day moving average — a technical signal that has kept many momentum?driven investors on the sidelines.
The core anxiety centres on the cost of the AI infrastructure build?out. Hardware suppliers are cashing the cheques, but “hyperscalers” such as Microsoft are writing them. Investors want hard evidence that the flood of spending on data centres will translate into sustainable returns, especially with interest rates remaining elevated. The market now differentiates sharply between the AI beneficiaries that sell the picks and shovels and the tech giants that foot the bills.
A long?term anchor
Microsoft’s backlog provides some reassurance. At $627 billion, the book of committed future revenue offers a degree of predictability rare in the tech sector, and the Chevron contract extends that logic into energy procurement. Still, a single infrastructure agreement is unlikely to shift the overall sentiment towards growth stocks, which have been under broad pressure this year.
Microsoft at a turning point? This analysis reveals what investors need to know now.
The next real test comes with the quarterly earnings release expected in late July. By then, investors will be scrutinising whether Azure’s 40 percent growth rate can be sustained and whether margins are holding up under the weight of $80 billion in annualised capex. Microsoft has the fuel, the customer commitments and the cash flow. What it needs now is a narrative that the market is willing to buy.
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