Microsoft capital spending of $45.2 billion misses estimates; CoreWeave and Nebius fall

Microsoft reported on Oct 28 that it spent $45.2 billion on capital expenditures, including finance leases, in its fiscal first quarter ended Sept 30. That was below the $50.7 billion average analyst estimate compiled by StreetAccount and the more than $50 billion Microsoft had told investors in July to expect.

Shares of CoreWeave and Nebius, which rent AI computing capacity to Microsoft, fell almost 5% in extended trading after the report, and IREN fell about 3%, CNBC reported. Microsoft shares rose more than 4% after hours.

The quarter

Capital spending rose about 30% from $34.9 billion a year earlier. In its earnings slides, Microsoft attributed the gap to timing differences between receiving goods and paying for them, and to a lower mix of finance leases.

Sales and profit beat analyst estimates. Azure, the cloud service businesses rent for computing and AI, grew 48%, above Microsoft's own forecast of 44% to 45% in constant currency.

Who is exposed

Microsoft relies on neoclouds, specialist providers that rent out AI data-center capacity, for part of its computing needs. It signed a deal worth nearly $20 billion with Nebius in late 2025 for computing through the 2030s, and it is a top customer of CoreWeave, CNBC reported.

The neocloud stocks fell steeply earlier in October as rising interest rates raised concerns that new debt would become too expensive. CoreWeave had gained 18% over the three trading days before the report and closed regular trading on Oct 28 at $63.93.

Alphabet also reported capital spending below estimates on Oct 28, at $51.36 billion against an expected $55.09 billion. Oracle shares rose 11% in regular trading on Oct 28 after it issued a long-term revenue forecast, then fell 3% after Microsoft's report.

What comes next

• IREN reports results for the quarter ended Sept 30 on Nov 5, with a call at 5 p.m. Eastern.
• CoreWeave holds its third-quarter results call on Nov 10 at 5 p.m. Eastern.