What is the reason behind Microsoft being the first to cut capital expenditures amidst the significant decline of the Industry Chain?
Behind Microsoft's temporary "contraction" is a mismatch in supply and demand and financial considerations. When there are changes in short-term demand patterns or Hardware selection, adjustments to external leasing or new construction speeds are necessary to maintain healthy ROIC (Return on Invested Capital). Microsoft's initial "contraction" does not indicate an overall downturn in the Industry; on the contrary, Meta and Google continue to maintain rapid expansion during this phase.
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The US stock market has fallen sharply again, and NVIDIA has suffered a heavy loss! A well-known Analyst revealed: Microsoft has abandoned its new Datacenter project in the US and Europe.
According to TD Cowen Analysts, Microsoft has abandoned new Datacenter projects in the USA and Europe, which were originally planned to consume 2 gigawatts of Electrical Utilities. The Analysts attribute this move to an oversupply of Computer clusters supporting AI operations. A related report from TD Cowen in February had already attracted significant attention, stating that Microsoft has canceled multiple lease agreements with various private Datacenter operators. Microsoft’s latest response stated, "While we may strategically adjust or slow down the pace of infrastructure development in certain areas, we will continue to maintain strong growth in all regions." On Wednesday, the rebound in US stocks abruptly stopped, with NVIDIA experiencing a decline of 6% at one point.
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