MSFT: $200 Billion in CapEx - for What?
Microsoft (MSFT) CapEx will probably come in around $80 billion this fiscal year ended June 2025. My estimate is that FY’26 CapEx will be $80 billion - flat with FY’25 - as investors are finally starting to ask “What is MSFT getting in return for its massive CapEx investment?” This represents $200 billion in CapEx over FYs 2024, 2025 and 2026. All in pursuit of what? Agentic AI?
Agentic AI - I can tell you from experience - is a long, long way off. It is far too unreliable and cumbersome at this juncture outside of a bit of automated coding. Fully autonomous business processes and systems are 20 years away in my view if not longer. Blockchain systems need to be widely deployed before AI reaches its potential.
Will fiscal 2027 be the year that Satya Nadella moves on after blowing $200 billion in CapEx over three years? I believe so. MSFT will have little AI Revenue to point to by the end of fiscal 2026. Watch how fast the narrative will turn on Nadella as we move through FY 2025 into 2026.