As tech giant Microsoft (MSFT) prepares for its fiscal second-quarter results due on January 28, the village board in Mount Pleasant, Wisconsin, approved 15 additional data centers. These data centers will be built adjacent to its current campus, spanning 9 million square feet with a taxable value exceeding $13 billion. Additionally, Microsoft launched Maia 200, its second-generation in-house AI chip designed primarily for efficient AI inference.
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The board voted on Monday, with a 6-3 vote, allowing Microsoft to pursue its largest data center project to date. This expansion will enable Microsoft to recognize revenue booked from artificial intelligence (AI) deals with OpenAI and other firms. Big Tech peers like Amazon (AMZN), Alphabet (GOOGL), and Oracle (ORCL) are racing to build data centers equipped with Nvidia (NVDA) chips for training and running massive generative AI models.
Microsoft Unveils Maia 200
The Maia 200 is built on Taiwan Semiconductor’s (TSM) 3nm process with over 100 billion transistors. It delivers up to 10 petaflops of speed in FP4 mode, three times faster than Amazon’s Trainium3, and beats Google’s TPU v7 in FP8 tasks. The chip, now deploying in Iowa data centers with more sites planned, offers 30% better performance per dollar than Microsoft’s prior Maia 100, powering tools like Microsoft 365 Copilot while reducing reliance on Nvidia.
Hyperscalers Face Stiff Opposition
Finding suitable sites is hard because the projects demand vast electricity and bring worries about noise, water use, and environmental impact. Wisconsin shows how crucial cooperative municipalities are in this infrastructure race. Microsoft abandoned similar plans in nearby Caledonia last September amid strong local opposition.
The Wisconsin site’s history underscores risks of big promises. In 2017, Foxconn pledged a $10 billion plant, touted by President Trump, promising 13,000 jobs. The village bought land and Wisconsin funded infrastructure, but by 2023, Foxconn delivered only 1,000 jobs, saddling Mount Pleasant with over $250 million in debt.
Expectations from Microsoft
The Street expects Microsoft to post adjusted earnings per share (EPS) of $3.91, reflecting a 21% year-over-year growth. Moreover, sales are forecast to jump 15.3% year-over-year to $80.31 billion, backed by strong growth in its Azure Cloud business.
Is Microsoft Stock a Buy?
On TipRanks, Microsoft stock has a Strong Buy consensus rating based on 33 Buys and two Hold ratings. The average Microsoft price target of $618.85 implies 31.6% upside potential from current levels. Over the past year, MSFT stock has gained 8.2%.
