Microsoft (MSFT)
Azure + OpenAI partnership. Major builds in TX, WI, UK.
- Ticker: MSFT
- Sector: hyperscaler (cloud)
Microsoft (MSFT) is a tracked supply-chain name in the data-center buildout in the hyperscaler sector. Data Center Index tracks Microsoft's capex history, project wins, and supplier exposure across the AI infrastructure buildout, refreshed daily from SEC filings and project announcements.
Microsoft data center thesis
Microsoft Q1-26 backlog hit $633B (+97% YoY), the largest commercial RPO ever disclosed, and 2026 capex guidance is $120B+ versus $64.55B in 2025. The 39-project Microsoft-developed footprint totals 13.5GW with another 9GW tied to OpenAI tenancy: Fairwater Wisconsin (3.3GW) and Fairwater Atlanta (859MW) anchor the largest AI-only DC footprint in the world. The thesis is digestion: $120B/year against $128.5B 2025 OI is the tightest ROI math of any hyperscaler.
Bull case
- Backlog ballooned from $304B (Q4-24) to $633B (Q1-26), a 108% YoY print on Q4-25 alone; even at conservative conversion, this funds the Azure capex cycle through 2028 with multi-year revenue visibility.
- Microsoft owns the deepest supply-chain alignment of any hyperscaler: long-dated contracts with Constellation (Three Mile Island restart, 837MW), CoreWeave (Helios 800MW), IREN (Sweetwater 600MW), and Crusoe (Abilene 941MW) effectively buy a year of speed-to-power.
- OpenAI exclusivity on Fairwater Wisconsin (3.3GW, $17.7B) means MSFT captures the upside of every ChatGPT user above the contracted floor; it is a leveraged call on OpenAI inference scale embedded inside Azure.
Bear case
- Stock at $415.12 is -4.66% YoY and sits at 30% of its 52-week range; the market has already started pricing in capex digestion, and Q4-25 backlog growth deceleration to flat-sequential ($631B to $633B) is the warning shot.
- $120B+ capex against $128.5B operating income is the tightest ratio of any hyperscaler; one quarter of weak Azure growth turns the depreciation ramp into immediate margin compression and triggers a cloud-multiple rerating.
- Single-customer concentration: OpenAI underwrites $63.9B of project cost across six sites totaling 9GW; any restructuring of the OpenAI commercial agreement (rumored repeatedly through 2025-26) leaves Azure long stranded capacity.
Microsoft revenue and capex
In fiscal 2026, Microsoft reported revenue of $331.8B, capital spending of $115.9B and operating income of $155.2B.
| Fiscal year | Revenue | Capex | Operating income |
|---|---|---|---|
| 2026 | $331.8B | $115.9B | $155.2B |
| 2025 | $281.7B | $64.6B | $128.5B |
| 2024 | $245.1B | $44.5B | $109.4B |
Tracked Microsoft data center projects
- Sweetwater Campus, 2 GW, Sweetwater, TX · under construction
- Start Campus Sines Data Campus, 1.2 GW, Sines, Portugal · operational
- Microsoft Australia AI Expansion, 1 GW est., Sydney, Melbourne, Canberra, Australia · operational
- Azure Northern Virginia, 1 GW est., Northern Virginia, VA · operational
- Azure Northern Virginia, 1 GW est., Northern Virginia, VA · operational
- Crusoe Abilene Expansion, 900 MW, Abilene, TX · under construction
- Crusoe Abilene Expansion, 900 MW, Abilene, TX · under construction
- Three Mile Island Restart, 837 MW est., Middletown, PA · under construction
- Microsoft Fairwater Atlanta, 636 MW est., Fayetteville, GA · operational
- Microsoft Fairwater Atlanta, 636 MW est., Fayetteville, GA · operational
Analysis mentioning Microsoft
- Anthropic IPO Odds After a $16.8 Billion Quarter: November Holds, $2 Trillion Doesn't, 2026-10-15
- Anthropic's $517 Billion in Compute Commitments: Amazon Books $100 Billion, and Google's Share Goes to Apollo, 2026-09-10
- OpenAI’s $1.15 Trillion Compute Bill: Who Actually Holds the Bag, 2026-09-08
- Lambda's $35 Billion One-Tenant Deal Rewrites the Customer Concentration Math for CoreWeave, Nebius and IREN, 2026-09-01
- The Supplier Map: Elon Musk Is One of His Own Biggest Data Center Suppliers, 2026-08-25
Recent Microsoft news
- Meeza and Microsoft launch sovereign private cloud in Qatar, DCD, 2026-10-16
- Microsoft denies cloud leadership called for significant cost cutting measures, DCD, 2026-10-14
- Microsoft acquires 600 acres of land for data center in Woodward, Iowa, DCD, 2026-10-14
- Microsoft Pushes Custom AI Chips with Azure Maia 300, Data Center Knowledge, 2026-10-13
- Microsoft unveils Azure Maia 300, says chip will be its “primary inference system”, DCD, 2026-10-13