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Microsoft and Amazon results point to AI demand being capacity-limited
Microsoft said Azure growth was constrained by GPU availability, while AWS warned AI demand could exceed cloud capacity through 2028.
LiveMint Markets said the latest quarterly results from Microsoft and Amazon suggest the AI spending cycle is starting to translate into stronger earnings, with both companies posting stronger-than-expected cloud growth. The outlet added that the key constraint has shifted from demand to capacity, as investors focus on whether returns on AI investment will outweigh the infrastructure buildout.
Microsoft reported 39% year-on-year growth in Azure and said Microsoft Cloud revenue exceeded US$51.5 billion for the first time. The company also indicated that Azure growth was limited not by customer demand but by the availability of GPUs, a sign that compute supply is becoming the main bottleneck for AI services, according to LiveMint Markets.
Amazon Web Services delivered 37% year-on-year revenue growth to US$42.2 billion, its fastest pace in more than four years, the outlet reported. Amazon also warned that AI demand could exceed available cloud capacity through 2028, and it raised planned 2026 capital expenditure to nearly US$220 billion to fund that expansion.
The market reaction reflected the optimism around AI monetization, LiveMint Markets said. Microsoft shares surged more than 15% after earnings, while Amazon climbed 15.3% after reporting more than US$62 billion in quarterly profit alongside 20% revenue growth that beat analysts expectations.