Microsoft's massive AI spending draws investor concerns as cloud business booms

Core Insights - Microsoft's AI infrastructure spending is exceeding Wall Street expectations, raising concerns among investors about the sustainability of this growth [1][3] - The company reported a record capital expenditure of nearly $35 billion for its fiscal first quarter, with expectations of increased spending this year [1][5] - Microsoft’s Azure cloud-computing business experienced a 40% growth in the July-September period, surpassing estimates [4] Financial Performance - Total revenue for Microsoft rose 18% to $77.7 billion, exceeding expectations of $75.33 billion [7] - Profit per share was reported at $3.72, beating the expected $3.67 [7] - The forecast for total revenue in the current quarter is between $79.5 billion and $80.6 billion, slightly above analyst expectations [5] Market Reactions - Microsoft shares fell nearly 4% in extended trading following the announcement of increased capital expenditures [2][6] - Concerns about rising spending and the potential for a tech bubble reminiscent of the dot-com era are prevalent among investors [3] Strategic Partnerships - Microsoft announced a revised deal with OpenAI, granting it a 27% stake valued at approximately $135 billion, along with a share of sales and access to intellectual property [8]