On October 29th, amidst the tech industry's continued heavy investment, Microsoft surprisingly lowered its capital expenditure expectations. According to a report by Business Insider this morning (October 29th), Microsoft CEO Amy Hood revealed during the financial report conference call that the company's capital expenditure for 2026 is expected to be $170 billion (Note from IT Home: at current exchange rates, this is approximately 1.14 trillion yuan), which is a reduction of $5 billion (approximately 33.403 billion yuan at current exchange rates) from the previous forecast of $175 billion (approximately 1.17 trillion yuan at current exchange rates).

Microsoft originally expected to obtain additional computing power provided by third-party suppliers, but some of the GPU computing power service contracts have been extended to the second half of fiscal year 2027 (corresponding to the first half of 2027).

These contracts may also involve other suppliers that use NVIDIA GPU to provide AI cloud services. As the delayed computing power is gradually delivered, Microsoft expects capital expenditures to grow more rapidly in the second half of this fiscal year.

Cloud service providers are spending heavily to expand their AI infrastructure, which is causing increasing concern on Wall Street. Microsoft did not raise its capital expenditure forecasts in the last quarter, standing in contrast to other cloud computing giants that are continuously increasing their AI spending budgets.

Financial reports show that for Microsoft's first fiscal quarter of the 2027 fiscal year, which ended on September 30, revenue increased by 19% year-over-year, reaching $92.3 billion (approximately 616.614 billion yuan at current exchange rates). Among this, the revenue from its Azure cloud business grew by 48%, exceeding $33 billion (about 220.458 billion yuan at current exchange rates), surpassing Wall Street's expectations.

After the financial report conference call, Microsoft's stock price rose by about 3% after the market closed.

Meanwhile, during that quarter, the number of Microsoft employees decreased by 2%. Earlier this week, Microsoft offered a voluntary severance package to more than a quarter of its employees. A Microsoft spokesperson revealed that the company expects that less than 5% of eligible employees will accept the package. "Microsoft provides many opportunities for development, so we anticipate that only a very small number of employees will take up this offer."