Microsoft lowered its 2026 capital expenditure forecast to $170 billion from $175 billion, citing delayed third-party capacity. The cut came alongside fiscal first-quarter results in which Azure revenue rose 48%.
Microsoft cut its capex forecast for the 2026 calendar year to $170 billion from a previous forecast of $175 billion. Business Insider calls the reduction a rare move in an industry that mostly continues to spend more on AI investments.
Chief Financial Officer Amy Hood gave the figure on the company's fiscal first-quarter earnings call on Wednesday.
Delayed capacity drives the lower forecast
Hood said Microsoft had expected new capacity to arrive from third parties, but some of those contracts have been delayed until the second half of the fiscal year. Business Insider says this likely refers to outside providers of AI cloud services that run Nvidia GPUs.
Hood's comments could also point to a recent spate of AI data center project delays, which have mostly been caused by a lack of electricity, along with local opposition, according to Business Insider. As a result, Hood said Microsoft expects capex to accelerate in the second half of its fiscal year, once the delayed capacity kicks in.
Azure revenue rises 48%
The spending cut arrived with the quarterly results. Microsoft reported $92.3 billion in revenue, up 19%, for the fiscal first quarter ending Sept. 30. Azure cloud revenue rose 48% to more than $33 billion, surpassing Wall Street expectations.
Microsoft shares rose about 3% in after-hours trading following the call.
Buyout offer and headcount
Earlier this week, Microsoft offered a buyout to more than a quarter of its workforce. A company spokesperson told Business Insider that Microsoft expects 5% of eligible employees at most to accept it.
Microsoft's headcount slipped 2% during the fiscal first quarter, the company reported.
Source: Business Insider
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