Morgan Stanley Projects Microsoft AI Capacity to Hit 20GW by Fiscal 2028
MSFT•Data center capacity for Microsoft’s AI is set to ramp from about 5GW in fiscal 2024 to nearly 20GW by fiscal 2028, suggesting underappreciated long-term revenue upside across Azure, Microsoft 365, Dynamics 365 and LinkedIn. Meanwhile, Snowflake’s new $6 billion five-year AWS agreement underscores increasing rivalry for Azure’s cloud AI workloads.
1. Morgan Stanley AI Capacity Projections
Morgan Stanley forecasts Microsoft will expand its installed AI data center footprint from roughly 5 gigawatts in fiscal 2024 to nearly 20 gigawatts by fiscal 2028. This projection implies a substantial increase in future sales opportunities beyond current Wall Street models.
2. Revenue Opportunities Across Microsoft Portfolio
The expanding data center capacity supports not only Azure cloud services but also underpins AI features in Microsoft 365, Dynamics 365 and LinkedIn. Broader adoption of AI-powered tools across these platforms could drive higher average revenue per user and improved margins.
3. Competitive Cloud Landscape and AWS Deal
Snowflake’s $6 billion five-year AWS agreement for Graviton-based AI compute highlights intensifying competition for Microsoft’s Azure. Microsoft’s own Maia AI chip launch and Azure’s global data center build-out are strategic responses to maintain pricing power and capture enterprise AI workloads.
