Don’t read too much into Microsoft’s AI data center slowdown

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Don’t read too much into

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’s AI data center slowdown

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(MSFT) says it still plans to spend $80 billion on data center infrastructure this year, according to

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, following a TD Cohen note saying the tech giant is beginning to cancel data center leases.

Gabelli Funds portfolio manager and managing director for growth portfolios John Belton joins Catalysts with Seana Smith and Madison Mills to discuss what t

“I would strongly advise against over-extrapolating these channel checks,” Belton says, warning investors, “These are the types of checks that can be very confusing to take out of context.”

He explains, “Are these leases that are being canceled that are net decremental to

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spending plans? Doesn’t seem so based on what the company said this morning; they say there’s absolutely no change in their data center spending plans. More than that, are these net decremental to industry-wide [capital expenditure] CapEx spend? Very unlikely.”

The portfolio manager adds, “Any change you’re going to see in

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’s near-term CapEx spending are probably related to the change in relationship with OpenAI, meaning lower

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CapEx spend would simply be higher Oracle (ORCL) CapEx spend.”

To watch more expert insights and analysis on the latest market action, check out more Catalysts here.

This post was written by Naomi Buchanan.

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#Dont #read #Microsofts #data #center #slowdown

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