Microsoft Sees Positive Cash Flow Through FY27, Capex Below Estimates After Accounting Change
MSFT sits 40% above its 52-week low of $349.2.
Summary
Microsoft now expects positive cash flow through fiscal 2027 and provided capex guidance below prior estimates following an accounting change, a sharp reversal from earlier fears of ballooning AI infrastructure costs. The stock has surged roughly 27% in the four days since the July 29 earnings report, reflecting relief that spending is more contained than the market had priced in. The company also disclosed a $329.1 billion unstarted data-center lease pipeline and $88.52 billion in recognized lease liabilities, underscoring the massive scale of its AI buildout. This follows the blowout Q4 and FY26 results that showed 18% revenue growth and 43% Azure growth, but the capex narrative is what's driving the current move. The accounting change and cash flow outlook directly address the biggest investor concern—whether AI spending would crush free cash flow—and the answer is a clear no.
At the time of this announcement, MSFT was trading at $490.52 on NASDAQ in the Technology sector, with a market capitalization of approximately $3.7T. The 52-week trading range was $349.20 to $553.72. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: Wiseek News.