Microsoft is facing capacity constraints, and OpenAI is driving a large portion of the backlog in its cloud computing business. The company said its backlog in commercial bookings, a metric referred to as remaining performance obligations, ballooned 110% year over year to $625 billion when it reported earnings for the second quarter on Wednesday. OpenAI accounts for roughly 45% of those commitments, Microsoft revealed.
But some analysts are starting to worry about how much of that growth is concentrated in AI.A recent note from Pantheon Macroeconomics said that private fixed investment-a measure of how much companies are spending-"is rising only due to AI-related spending." Analyst Oliver Allen published a chart this morning showing that all other private fixed investment is actually in decline: "Capex intentions remain depressed, suggesting investment outside of AI-linked sectors remains weak," he told clients in a note seen by Fortune.
Meta Platforms is likely to deliver one of the most closely watched quarterly reports of the upcoming earnings season. With the company spending heavily to transition the social media giant into a more artificial intelligence (AI)-focused operation, investors will have all the more reason to focus on the " Magnificent Seven" stock. Investors might recall the 20% gain in the stock following the release of the February 2024 numbers.
