AI datacenter buildout (Fairwater and Azure AI capacity)
Capacity-constrained. Management says demand still exceeds supply, and Microsoft added about one gigawatt in the June 2026 quarter.
The numbers
What it is
Microsoft is building large AI datacenter sites, branded Fairwater, and adding capacity across Azure. Capex additions to property and equipment were $115.9 billion in fiscal 2026, against $64.6 billion in fiscal 2025. From fiscal 2027 the useful life of datacenter buildings is extended from 15 to 25 years, which shifts future leases from finance to operating leases and lowers reported capex.
Why it matters to the stock. Capex is the largest swing factor in the stock. Azure growth tracks how quickly new capacity comes online, and depreciation rises as this capacity is placed into service. The useful-life change affects reported capex, so compare capex across quarters with care.
News
Bernstein raises Microsoft price target to $660 from $647, Outperform kept
Bernstein analyst Mark Moerdler raised his Microsoft price target to $660 from $647 and kept an Outperform rating, according to an article dated August 10, 2026.
Microsoft Q4 FY26: revenue $90.0B, Azure +43%, FY26 revenue $331.8B
Revenue rose 18% to $90.0 billion and GAAP EPS was $4.81, up 32%.
Hood guides calendar 2026 capex to about $190B and Azure to accelerate in H2
On the April 29 fiscal Q3 call, CFO Amy Hood said Microsoft expects to invest roughly $190 billion in capital expenditures for calendar 2026, including about $25 billion from higher component pricing.
Microsoft says it is first hyperscaler to power on Nvidia Vera Rubin NVL72
At Nvidia GTC on March 16, 2026, Microsoft said it was the first hyperscale cloud to power on Nvidia's Vera Rubin NVL72 system, done in its labs.