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Microsoft Plans More China Data Centers in Asia Cloud Push – Report
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Microsoft Plans More China Data Centers in Asia Cloud Push – Report

Microsoft (MSFT) plans to build four more data centers in China by early 2022 to add to the existing six it already operates in the country, according to a Bloomberg report citing confidential sources. The planned additional facilities are part of the company’s efforts to expand its cloud computing capacity across Asia.

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The global demand for internet services increased during the COVID-19 pandemic. Microsoft seeks to take advantage of this with capacity expansion.  The company aims to double its intelligent cloud capacity in China in the coming years. 

Microsoft has a local partner that operates its data centers in China. Its existing six data centers in the country are managed by a company called 21Vianet, according to Bloomberg.

Chinese companies are increasingly migrating to the cloud after being slow to do so in past years, and Microsoft is expecting a boom in data storage and management demand. China’s cloud market is expected to reach $46 billion in 2023. Microsoft’s commercial cloud revenue for the quarter ended March 31 increased 33% to $17.7 billion. (See Microsoft stock chart on TipRanks)

Tigress Financial analyst Ivan Feinseth recently reiterated a Buy rating on Microsoft stock with a price target of $303. The analyst’s price target implies 16.14% upside potential.

Feinseth believes that ongoing digital transformation will add growth to Microsoft’s profit, leadership position, and revenue.

Consensus among analysts is a Strong Buy based on 26 Buys. The Microsoft average analyst price target of $297.96 implies 14.20% upside potential to current levels.

MSFT scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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