Technology giant Microsoft (MSFT) says that it plans to spend $80 billion in its fiscal 2025 financial year on the construction of data centers that can handle advanced artificial intelligence (AI) workloads.
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In a blog post on January 3, Microsoft President Brad Smith said that more than half of the $80 billion allocated to new AI data centers will be spent within the U.S. Microsoft’s 2025 fiscal year ends on June 30. Microsoft is a leader in generative AI, mostly through its partnership with privately held start-up OpenAI.
“Today, the United States leads the global AI race thanks to the investment of private capital and innovations by American companies of all sizes, from dynamic start-ups to well-established enterprises,” wrote Smith in the blog post. “At Microsoft, we’ve seen this firsthand through our partnership with OpenAI.”
Data Center Gold Rush
Microsoft and other technology companies such as Alphabet (GOOGL) and Amazon (AMZN) are rushing to build and power AI data centers that can run Nvidia (NVDA) graphics processing units and train cutting edge AI models.
Microsoft has invested more than $10 billion in OpenAI and integrated the company’s ChatGPT assistant into its various products, including the Bing online search engine. Microsoft has also announced plans to restart the infamous Three Mile Island nuclear plant in Pennsylvania and use the power it generates to help power its AI data centers.
MSFT stock has risen 16% in the last year.
Is MSFT Stock a Buy?
The stock of Microsoft has a consensus Strong Buy rating among 29 Wall Street analysts. That rating is based on 27 Buy and two Hold recommendations issued in the last three months. The average price target on MSFT stock of $503.61 implies 18.98% upside from current levels.
