Microsoft's cloud backlog surged to $625B, with OpenAI driving nearly half the demand, fueling investor concerns over capacity limits, rising AI costs, and Azure growth.

Microsoft has stood up 1GW of data center capacity in Q2 of FY2026 alone, in another quarter of heavy spending. This is a rapid increase in deployment timelines, with the company previously bringing 2GW online in FY2025 as a whole.

The company said on Wednesday that revenue in the most recent quarter was $81.3 billion, but its share price dropped more than 5 percent in after-hours trading.

Microsoft shares slumped after record AI-driven capital spending and a slowdown in Azure growth reignited investor concerns over returns on massive cloud investments

Revenue for Azure AI Services is projected to reach $23.57 billion in fiscal year 2026, up from $18.80 billion in January 2025. Expectations for this segment’s fiscal second-quarter revenue have risen by more than 20% since July and nearly 25% since January 2025, underscoring optimism around demand for AI-enabled cloud infrastructure.

By Deborah Mary Sophia, Aditya Soni and Stephen Nellis Jan 28 (Reuters) - Microsoft said on Wednesday it had spent a record amount on artificial intelligence in the last quarter and posted slower cloud-computing growth,

Wall Street analysts remained overwhelmingly bullish on Microsoft, even as the stock dipped 12% post-earnings.

Microsoft will pause Azure Monitor legacy agent data uploads for 12 hours on January 26, 2026, as a final test before shutdown.

A.I. chip, Maia 200, calling it “the most efficient inference system” the company has ever built. Microsoft claims the chip outperforms rival Big Tech processors such as Amazon ’s Trainium 3 and Google ’s TPU v7 on key benchmarks,