NEW YORK, June 25, 2026, 08:03 EDT
- Microsoft shares have fallen 24% this year through June 24, on track for their worst first half since 2000.
- The company’s AI revenue run rate is now above $37 billion. But when you add up planned 2026 capex and datacenter leases that haven’t started yet, that totals about 10.4 times the AI run rate.
- EU regulators are pressing to bring Microsoft Azure and Amazon Web Services into scope under new cloud gatekeeper rules.
- Chip names climbed after Micron and Qualcomm offered upbeat forecasts, increasing the divide between AI suppliers and buyers of AI infrastructure.
Microsoft (NASDAQ:MSFT) traded at $365.46 ahead of the U.S. open Thursday, off 2.3% from its last close. The U.S. cash market had not started trading yet in New York.
Microsoft shares fell even as the company posted stronger sales. Fiscal third-quarter revenue was up 18% to $82.9 billion, net income rose 23% to $31.8 billion, and Azure and other cloud saw a 40% gain. Microsoft Cloud revenue hit $54.5 billion, up 29%.
Microsoft’s AI business hit $37 billion in ARR, up 123%, CEO Satya Nadella told investors. CFO Amy Hood put expected capital spending at about $190 billion for calendar 2026, which is about 5.1 times the current AI run rate. The bigger question for investors now is when those numbers pay off.
Microsoft’s most recent quarterly filing piles on more commitments. The company listed $196.6 billion in additional leases—mainly for datacenters—that hadn’t started by March 31. That’s about 5.3 times the current AI run rate. Fold in the 2026 capex plan, and the total is $386.6 billion, or 10.4 times the AI run rate.
Microsoft has a big backlog, but most of it sits further out. The company reported commercial remaining performance obligation at $627 billion. About 25% should hit in the next year, or $156.8 billion. That’s less than Microsoft’s planned 2026 capex.
Microsoft is cheap by one measure but the stock is still under pressure. The shares are at 20.2 times forward earnings, their lowest level since late 2016, Koyfin data via Stocktwits shows. Stocktwits notes 53 out of 56 analysts rate it Buy or better.
Bulls are holding that gap. Seeking Alpha contributor Andres Veurink called Microsoft a Strong Buy on June 24, pointing to shares trading 20% to 25% under five-year valuation averages. Datacenter spend is pushing faster revenue and more commercial obligations, Veurink wrote.
Microsoft (NASDAQ:MSFT) could see shares climb 33.24% to $489.45 in 12 months, according to 24/7 Wall St.’s Vandita Jadeja. The call is based on the recent price of $367.34. But Jadeja aligns her positive target with caution, noting Microsoft is running a $37 billion AI run rate and reports $30.88 billion in capex for the quarter.
The EU’s regulatory outlook grew tougher. Antitrust officials said Amazon.com’s (NASDAQ:AMZN) AWS and Microsoft Azure qualify as gatekeepers under the Digital Markets Act, meaning new rules on self-preferencing, interoperability and data portability. Microsoft said Google Cloud and Gemini, from Alphabet (NASDAQ:GOOGL), should also face the same rules, warning their exclusion could “tilt the market in a harmful way.” Reuters
Nasdaq futures climbed more than 2% after Micron Technology (NASDAQ:MU) and Qualcomm (NASDAQ:QCOM) pointed to solid AI infrastructure demand. Reuters said Micron has $22 billion in chip commitments from customers. Qualcomm is targeting $15 billion in datacenter revenue by 2029. Daniela Hathorn, senior market analyst at Capital.com, said Micron’s results show the “AI investment cycle remains firmly intact.” Reuters
That’s the catch for Microsoft holders. Chipmakers are getting orders in the AI cycle today, but Microsoft is stuck with the spending, leases, power bills and regulatory risk as it tries to build AI use into its cloud revenue.
