Microsoft reported $45.2 billion in capital expenditures and finance leases for the quarter, up roughly 30% year over year but well below the $50.7 billion average analyst estimate tracked by StreetAccount1. The company blamed data center delays for the shortfall2.
CoreWeave and Nebius Group NV slid almost 5% in extended trading after the report, while Iren fell about 3%. The sell-off compounds what has already been a volatile stretch for the neocloud sector, where rising interest rates have stoked concern that future debt raises will grow too expensive and lenders will pull back.
Microsoft is particularly dependent on neocloud partners for AI infrastructure capacity. The company inked a nearly $20 billion deal with Nebius at the tail end of last year for compute through the 2030s, and it is a top customer for CoreWeave. A capex figure that falls short of expectations because infrastructure partners are taking longer to deliver capacity directly pressures those partners' near-term revenue outlook.
Microsoft separately reported that Azure revenue jumped 48% from a year earlier, a sign that demand for cloud and AI services remains strong even as the physical buildout lags.
The neocloud group had bounced back earlier in the week on positive analyst commentary.
ANALYSIS The after-hours drop following Microsoft's report cut into that recovery.
Microsoft recorded $10 billion in revenue from commercial arrangements with OpenAI in the quarter ending September 30, representing nearly 11% of total quarterly revenue[3].
ANALYSIS The gap between strong AI-driven cloud revenue and slower-than-planned physical infrastructure spending suggests the bottleneck sits in construction and delivery timelines rather than in end-user demand.