Microsoft's F4Q Puts Compute Overcapacity Debate to Rest

Dow Jones07-31

1422 ET - Microsoft's recent earnings should be conclusive proof that the AI infrastructure buildout has not overextended itself, Benchmark analyst Yi Fu Lee writes in a note. "The number one investor pushback we receive is concern of AI infrastructure build out overcapacity," Lee says, citing reports of Meta considering selling excess computing power. But the strong showing from Azure--43% growth that continues to accelerate and demand continuing to exceed capacity--"puts this debate to rest," Lee says. "The company has great AI/Cloud customer pipeline visibility and the observation that any new capacity brought online is utilized serves as proof. We believe this reinforces our longstanding view that Azure growth remains constrained by supply availability rather than demand." Microsoft jumps 17%.

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Comments

  • Rainy777
    07-31
    Rainy777
    Lol. Half of the increase in Azure was from OpenAI, using Microsoft's money.
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