Microsoft trims full-year capex to about $170B as some GPU contracts slip

On October 29, 2026, Microsoft CFO Amy Hood used the Q1 FY2027 earnings call to lay out the company's capex plan. She said capital spending would exceed $50 billion in the second quarter, bringing the full-year figure to about $170 billion. According to IT Home, citing Business Insider the same day, Microsoft revised its 2026 capex expectation down by $5 billion, from $175 billion to $170 billion. The reason given was that some of the incremental compute Microsoft had expected from third-party suppliers would arrive later than planned, with part of the GPU compute service contracts pushed into the second half of FY2027 (corresponding to the first half of calendar 2027). Those contracts may involve other providers running AI cloud services on NVIDIA GPUs.

Hood added that because of the third-party capacity delays previously discussed, Microsoft now expects capex to accelerate through the second half of the fiscal year, driven mainly by CPUs (including higher memory and storage costs), GPUs, and third-party capacity that has slipped into later delivery. She also said that as infrastructure efficiency keeps improving, each capex dollar has the potential to generate higher revenue and returns over time. Given the strong business performance, Microsoft expects positive free cash flow for FY2027, and will pursue additional financing options when it sees fit to supplement cash generated by operations and preserve financial flexibility. The earnings release showed Q1 FY2027 revenue, for the quarter ended September 30, up 19% year over year to $92.3 billion. As of now, the story stands at the point where Microsoft has provided the roughly $170 billion full-year capex figure and expects spending to pick up in the second half of the fiscal year; the dollar value attached to the deferred contracts has not been disclosed.