Microsoft Stock Gains 4.7% as AI Spending Comes in Below Estimates

After Microsoft turned in results that cleared expectations and kept capital spending under the level Wall Street had penciled in, the company's shares rose 4.7% in post-market action Wednesday. The capex figure for the quarter was $39.37 billion, versus a forecast of $45.93 billion.

Elsewhere among the big tech names, investors reacted the other way. Alphabet, by contrast, put $51.4 billion to work in the quarter and watched its shares drop 8% in extended trading.

Microsoft's Lighter Bill Comes With a Forecast Beat

Analysts had looked for $90.63 billion in revenue, but Microsoft delivered $92.28 billion. Adjusted EPS of $4.89 came in above the $4.73 consensus.

Yahoo Finance data showed the after-hours session price at $555.33, against the $531.01 closing level.

That gap between the two numbers is notable. In July, Chief Financial Officer Amy Hood said the company would spend more than $50 billion in the quarter, according to BigGo.

After that July update, shares had climbed more than 8% in extended trading, Calcalist reported.

Lower Spending: Real Cut or Accounting Change?

No definitive answer has emerged. Microsoft's 2026 spending figure was restated to approximately $175 billion in July when the company changed its lease classification.

According to Hood, the reclassification left the company's plans intact.

“…there is no change to the actual investment plan”

Whether the reduced amount is a genuine cut or a bookkeeping effect should become clear on the earnings call.

$MSFT CRUSHED THEIR Q1 EARNINGS

• Revenue $92.2B vs Est. $90.7B
• EPS $4.89 vs Est. $4.72
• Azure Revenue $33.2B vs Est. $32.3B
• Operating Income $45.9B vs Est. $43.9B
• Commercial RPO: $677B vs Est. $706B
• CapEx $39.4B vs Est. $45.9B

— Shay Boloor (@StockSavvyShay) October 28, 2026

Kevin Warsh's Rate Warning Adds to the Pressure

The figures landed just hours after Federal Reserve Chair Kevin Warsh spoke. He told journalists he is doubtful about the argument that rate hikes will have no effect on AI.

In his telling, the tech sector is already feeling the impact of rates, and credit spreads — the premium lenders ask for above risk-free government debt — have widened as well.

For AI builders that borrow, that is a live concern. A Bank of Korea report cited by Herald puts Microsoft among five major tech firms with $230 billion in bond issuance this year.

Days earlier, BeInCrypto reported that investors were facing a no-win test around Big Tech, punishing both increases and cuts in spending. On Wednesday, Microsoft shares advanced after the smaller capital expenditure figure.