Investing.com -- Microsoft’s latest earnings report provided a “positive read-through for power demand,” according to Cantor analysts, with key implications for data centers, GPU infrastructure, and Bitcoin miners.
The tech giant reported that total capital expenditures are expected to increase in fiscal year 2026, though at a slower rate than in 2025.
The firm explains that Microsoft’s spending this year is focused on long-lived assets, such as data center infrastructure, while next year’s capex will prioritize short-lived assets, including GPUs.
Microsoft’s management reiterated that they are “capacity-constrained because of a lack of long-lived assets and have been short power and space.” However, they anticipate reaching equilibrium by year-end.
Over the past three years, Microsoft (NASDAQ:MSFT) has more than doubled its data center capacity, with the last year marking its largest expansion to date, notes Cantor.
They add that the company also aims to maintain flexibility in its GPU fleet, continuously upgrading hardware rather than committing to any single model, given the “step-function improvement” each new iteration brings. Microsoft also highlighted the importance of geographic diversification in its data center footprint.
Cantor views this update as a “solid read-through to CORZ,” noting Microsoft’s long-term contract with CoreWeave, a private AI cloud provider. Despite recent concerns about the impact of DeepSeek’s AI advancements, the firm believes CoreWeave remains an essential capacity lever for both Microsoft and OpenAI.
The report also raises the question of whether Microsoft will reach equilibrium through its own data center expansion or by leasing third-party facilities. If leasing plays a larger role, Cantor sees a “positive read-through for APLD,” which is developing liquid cooling infrastructure for GPUs.
Ultimately, the need for power “is not going anywhere,” says Cantor.
As Microsoft shifts capex toward GPUs, Cantor expects power demand to continue rising, benefiting firms with available capacity, including IREN, GLXY, RIOT, CIFR, and HUT.