Neocloud stocks drop after Microsoft revises capex down

Shares of neoclouds like CoreWeave and Nebius dropped in extended trading as Microsoft's lower-than-expected capital expenditures figure points to infrastructure partners taking longer to deliver data center capacity.

Microsoft on Wednesday reported $45.2 billion worth of capex and finance leases during the quarter, up about 30% from a year earlier, but below the $50.7 billion average analyst estimate, according to StreetAccount.

Microsoft is particularly reliant on neoclouds for capacity as it pours money into its artificial intelligence infrastructure. Microsoft inked a nearly $20 billion deal with Nebius at the tail end of last year for compute through the 2030s. It's also a top customer for CoreWeave.

Those companies and their peers have experienced a rocky few weeks on the market as rising interest rates led to concerns that future debt raises will be too expensive and lenders will start retreating.