Analysts flag possible slowdown in Microsoft's AI data-centre leases, raising attention of investors

An analyst note flagging a possible slowdown by Microsoft in leasing for data centre capacity grabbed the market’s attention.

An analyst note flagging a possible slowdown by Microsoft in leasing for data centre capacity grabbed the market's attention on Monday, lending credence to skepticism among investors worried that the AI-led stock-market boom might be overdone.

TD Cowen analysts in a note Friday said the tech giant had scrapped leases for sizeable data centre capacity in the United States, suggesting potential oversupply as it builds out artificial intelligence infrastructure.

The brokerage, citing its supply chain checks, said Microsoft has cancelled leases totaling "a couple of hundred megawatts" of capacity with at least two private data-centre operators, the analysts led by Michael Elias said.

Microsoft's plan to invest over $80 billion in AI and cloud capacity this fiscal year remains on track, a company spokesperson said. "While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions," the spokesperson added.

While Microsoft shares were little affected - the stock was down 0.8% in late-day trading on Monday - other related companies took a hit. Shares of German firm Siemens Energy and French company Schneider Electric fell 7% and 4%, respectively.

U.S. utility companies Constellation Energy and Vistra, which provide power for data centres, lost 6.2% and 3.7%, respectively.

Investor skepticism over the billions that U.S. tech firms have channeled into AI infrastructure has grown due to slow payoffs and breakthroughs at Chinese startup DeepSeek, which showcased AI tech at a much lower cost than its Western rivals.