Microsoft Corp (NASDAQ: MSFT) is navigating growing scrutiny over the energy costs of its data-center expansion while preparing to give investors greater visibility into Azure, its key cloud and artificial intelligence growth business. Microsoft Challenges Virginia Data-Center Rules
Microsoft appealed to the Virginia Supreme Court after state regulators ordered data centers to pay upfront for transmission infrastructure built specifically for them.
The challenge comes months after Microsoft joined Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) Google, Meta Platforms Inc (NASDAQ: META), xAI, Oracle Corp (NYSE: ORCL) and OpenAI in signing President Donald Trump's "ratepayer protection pledge," committing to pay the full cost of their energy and infrastructure.
Microsoft said it remains committed to bearing "the costs [data centers] cause" and wants Virginia's approach to "appropriately" apply cost-causation principles, the Financial Times reported on Friday.
The company previously argued that Virginia's rules could conflict with federal efforts to standardize how data centers pay for grid upgrades.
Microsoft operates, plans, or is constructing at least 11 data-center campuses in Virginia.
Azure Gets Greater Financial Transparency
Separately, Microsoft will begin reporting quarterly Azure revenue after years of calls from Wall Street for greater disclosure.
Investor Relations chief Jonathan Neilson said Azure's growing scale made this the appropriate time to provide additional transparency, Bloomberg reported on Thursday.
Microsoft disclosed Azure revenue of $29.4 billion for the most recent quarter and said annual Azure sales surpassed $100 billion, up from $75 billion a year earlier.
Microsoft Reshapes Reporting Around AI
Microsoft will also combine Intelligent Cloud and Productivity and Business Processes into a new Agents and Infra segment, while More Personal Computing becomes Devices and Consumer.
CEO Satya Nadella's note, as per Bloomberg, said artificial intelligence "is changing what we build and how we operate" while reshaping Microsoft's business models. Former CEO Steve Ballmer, who pushed for greater cloud disclosure as far back as 2015, called Azure revenue "sort of a key metric" and argued Microsoft should report it if cloud remained central to the company.
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $559.60 (high: $700.00; low: $480.00) across 50 analysts. Recent analyst moves include:
- Stifel: Hold (Raises Forecast to $530.00) (Sept. 4)
- B of A Securities: Buy (Raises Forecast to $600.00) (Sept. 1)
- Wells Fargo: Overweight (Raises Forecast to $700.00) (Aug. 12)
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Price Action
MSFT Stock Price Activity: Microsoft shares were down 1.48% at $492.30 on Tuesday, according to Benzinga Pro data.