Microsoft Is Dramatically Boosting AI Investments as It Races to Keep Up With Demand

Core Insights - Microsoft reported a significant increase in capital expenditures, reaching $34.9 billion in the fiscal first quarter, up from $24.2 billion in the previous quarter, primarily to enhance its AI infrastructure [1][7] - The company plans to double its data center footprint over the next two years to meet the growing demand for AI services [2] - Microsoft's strong quarterly results, with earnings per share of $3.72 and revenue of $77.7 billion (an 18% year-over-year increase), indicate robust demand for its cloud and AI offerings [4] Financial Performance - Earnings per share for the fiscal first quarter were $3.72, exceeding analysts' expectations [4] - Revenue from the Intelligent Cloud division, which includes Azure, rose 28% to $30.9 billion, surpassing the anticipated $30.3 billion [4] - Microsoft expects current-quarter revenue to be between $79.5 billion and $80.6 billion, slightly below analysts' consensus of $80.14 billion [5] Market Reaction - Following the earnings report, Microsoft shares experienced a decline of about 2% in extended trading, despite a nearly 30% increase for the year 2025 through Wednesday's close [5]