Microsoft's AI Infrastructure Gambit Fuels Pre-Earnings Momentum

A strategic pivot in Norway is providing a significant tailwind for Microsoft’s stock ahead of its quarterly earnings report. The company has expanded its agreement with AI cloud provider Nscale to take over computing capacity at a 230-megawatt data center campus in Narvik. This capacity was originally reserved for its partner, OpenAI, after the two failed to agree on terms.

The deal grants Microsoft more than 30,000 additional Nvidia Vera Rubin GPUs under a five-year contract starting in 2026, with an ultimate target of up to 100,000 Nvidia chips at the site. The move supplements an existing $6.2 billion investment Microsoft has at the same location. OpenAI stated it will instead source the required computing power through Microsoft, utilizing funds already committed under a previously announced $250 billion Azure contract.

This marks the second such infrastructure acquisition in recent weeks. Last month, Microsoft took over a 700-megawatt data center in Texas that had been abandoned by OpenAI and Oracle. The company is further expanding its footprint, having purchased 3,200 acres of land in Wyoming for additional data center development. This aggressive infrastructure push addresses capacity constraints that have limited Azure in recent quarters, with Wall Street expecting capital expenditures of $143 billion this year, largely for data centers.

The timing of this expansion aligns with a notable surge in customer demand. A recent KeyBanc survey delivered a strong signal, showing 85% of respondents plan to increase their Azure spending—the highest reading in five quarters. Nearly half have already moved Microsoft’s AI assistant Copilot into production, a 14-percentage-point increase from the prior quarter. Citing rising customer demand and Microsoft’s leading position in securing AI workloads, KeyBanc reaffirmed its Overweight rating with a $600 price target.

Financially, the company enters its earnings report from a position of strength. For the quarter ending December 2025, revenue grew 17% to $81.3 billion. Operating income rose 21%, while adjusted earnings per share jumped 24% to $4.14. Azure revenue advanced 39% year-over-year. Microsoft also returned $12.7 billion to shareholders via dividends and buybacks in the quarter, a 32% increase from the prior year period. The company’s commercial remaining performance obligation stands at $625 billion, a 110% increase year-over-year.

Should investors sell immediately? Or is it worth buying Microsoft?

On the exchange, the stock has responded positively. Shares recently traded around 355 euros, marking a roughly 15% gain from the low in late March. Over a seven-day period, the stock advanced approximately 12%, one of its strongest multi-day sequences since 2020. Despite this recovery, the share price remains about 26% below its 52-week high of 467.45 euros.

OpenAI’s retreat from direct infrastructure ownership appears systematic. The company recently told investors its infrastructure budget through 2030 is $600 billion, a more concrete and conservative figure than earlier communicated long-term commitments of $1.4 trillion. It also halted its UK-based "Stargate" project last week, citing energy costs and the regulatory environment. An anticipated IPO is likely further sharpening its spending discipline.

All eyes now turn to Microsoft’s third-quarter fiscal 2026 results, due on April 29. Wall Street anticipates revenue growth of around 16%. The key question for investors will be whether the newly acquired capacity in Narvik and Texas, coupled with rising customer intent, translates into accelerated Azure growth figures for the upcoming quarter.

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Microsoft Stock: New Analysis - 16 April

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Microsoft's AI Infrastructure Gambit Fuels Pre Stock: New Analysis - 16 April

Fresh Microsoft's AI Infrastructure Gambit Fuels Pre information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Microsoft's AI Infrastructure Gambit Fuels Pre analysis...