Microsoft’s share drops in response to a report of canceled data center leases

After the software giant canceled contracts on two data centers in the United States, reported investment banks TD Cowen, Microsoft investment fell on Monday.

According to MarketWatch data, the stock dropped 1.8 % during Monday’s trade, but it has since risen back to its opening price of$ 404.04.

Microsoft terminated find leases with at least two personal data centre operators across several U. S. markets, finance for” a couple of hundred megawatts” of strength, according to a copy of TD Cowen’s report as cited by Bloomberg.

According to the Electric Reliability Council of Texas, a watt you supply 250 homes with electricity during peak times.

Our first reaction is that this is tied to Microsoft possibly being in an excess position, TD Cowen apparently wrote.” While we have but to get the level of color that we would enjoy into why this is occurring, we have yet to find the level of color via our channel checks that we would enjoy into why this is occurring.”

Artificial intelligence depends greatly on massive amounts of data, requiring increased computing power, greater store, and faster community speeds—all of which data centres provide.

However, more recent open-source AI platforms like DeepSeek claim to run at a lower cost than their British competitors. Artificial designers may be reevaluating where their money is going.

Microsoft’s selloff, according to a source with knowledge of the matter, reflects a change in OpenAI loads toward rivals like Oracle.

Oracle, Google, and Meta have all seen substantial year-over-year growth in demand, while Amazon’s desire has remained stable.

There are now 3, 317 data centers in the U. S. only, according to statistics from tracking site Data Center Map.

Microsoft responded to questions about changes to its data centre strategy and reiterated its commitment to making continued investments in infrastructure and growth to meet growing customer demand.

We will continue to grow highly in all regions, according to a Microsoft spokesman in a speech to . This enables us to put assets into growth-oriented projects for the future.

Microsoft plans to spend$ 80 billion on “infrastructure” in 2025, the spokesperson said.

Microsoft is changing its data centre use goals over the upcoming years as a result of stronger competition from other gamers launching new projects, according to Blockspace Media co-founder May Foxley.

I don’t think the TD Cowen word is overly significant in the long run because Microsoft is also aggressively flexing its resources for information centre growth.

Foxley, the original Compass Mining Director of Media and Strategy, noted that these changes or cancellations are common for large businesses.

” A organization like Microsoft is likely dealing globally for lots of data centres simultaneously”, he explained. ” A few refunds aren’t particularly surprising”.

Foxley, in contrast, pointed out that for Bitcoin laborers, the stakes may be significantly higher if they were to cancel data center leases.

” Workers have less money and work under tighter timescales”, Foxley said. That implies that delays can quickly lead to disastrous results.