Microsoft (MSFT) says it still plans to spend $80 billion on data center infrastructure this year, according to reporting from Seeking Alpha, following a TD Cohen note saying the tech giant is beginning to cancel data center leases.
Gabelli Funds portfolio manager and managing director for growth portfolios John Belton joins Catalysts with Seana Smith and Madison Mills to discuss what t
“I would strongly advise against over-extrapolating these channel checks,” Belton says, warning investors, “These are the types of checks that can be very confusing to take out of context.”
He explains, “Are these leases that are being canceled that are net decremental to Microsoft spending plans? Doesn’t seem so based on what the company said this morning; they say there’s absolutely no change in their data center spending plans. More than that, are these net decremental to industry-wide [capital expenditure] CapEx spend? Very unlikely.”
The portfolio manager adds, “Any change you’re going to see in Microsoft’s near-term CapEx spending are probably related to the change in relationship with OpenAI, meaning lower Microsoft CapEx spend would simply be higher Oracle (ORCL) CapEx spend.”
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This post was written by Naomi Buchanan.
