Microsoft raises 2026 capital expenditure forecast to $190 billion, citing $25 billion increase due to rising component costs

Microsoft expects 2026 capital expenditure of $190 billion, with $25 billion attributable to rising memory and storage prices that have more than tripled in some cases since last northern autumn.

Last quarter Microsoft spent roughly $32 billion on compute capacity; the company plans to spend about $40 billion next quarter on hardware and datacenters, and expects to remain constrained at least through 2026.

In the last four quarters, Microsoft spent roughly $97 billion on infrastructure and equipment to win $37 billion of annual recurring revenue (ARR) for its AI services—up 123 percent from this time last year—but the company has not yet achieved obvious ROI.