Some Investors Are Questioning the AI Trade. Microsoft Is Bucking the Trend

MSFT is holding up while parts of the AI trade wobble, with Azure now at $100 billion in annual revenue, a 41% increase. That figure gives bulls hard evidence that heavy AI spending is converting into sales rather than just inflating costs.

The company's annual capital expenditure on AI infrastructure runs $175 billion, the exact kind of outlay that has made some investors question whether AI stocks can turn spending into profit. MSFT's Azure growth suggests the spending is paying off, though that is an interpretation of the numbers rather than a company claim.

Copilot adds a second proof point. MSFT now counts 30 million paid Copilot subscribers, a concrete measure of monetization that sits alongside the cloud growth.

Management is guiding for 45% Azure revenue growth in fiscal 2027. That would be an acceleration from the current 41% pace. Interpretation: guiding to faster growth on a $100 billion base signals management sees demand outrunning its capacity buildout, which is the opposite of the concern weighing on peers.

NVDA is not detailed in the source, but it remains tied to the same debate, since the AI infrastructure spending question applies across the group.