American tech giant Microsoft’s (MSFT) President Brad Smith announced today that the company is eyeing expansion in the European Union (EU), despite the strict norms against big tech. While addressing a keynote in Brussels this morning, Smith highlighted that “Microsoft has long respected and complied with European laws” and committed to increasing its data center capacity in Europe by 40% over the next two years.
Additionally, Microsoft plans to expand its data center footprint to 16 European countries. With the ongoing construction, these plans are set to double its capacity in Europe between 2023 and 2027. The news comes as the White House expresses anger with the bloc’s regulators for penalizing Apple (AAPL) and Meta Platforms (META) with a combined $797 million in fines for violating the Digital Markets Act (DMA).
The EU has established strict regulations, such as the DMA and the European Competition Law, to address concerns about monopolistic practices, protect user privacy, and creating a more transparent and competitive digital economy.
Microsoft Supports EU Laws Amid U.S. Criticism
Smith acknowledged that the company has been complying with the bloc’s regulations and respects them, “just as local laws apply to local practices in the United States.” He further added that Microsoft is keen on building digital infrastructure in Europe and will fight back any country that orders it to suspend or cease cloud operations in the region.
To reinforce its commitment to the bloc, Smith also said that going forward, all of Microsoft’s data center operations and their boards would be overseen by European nationals, and the entity would operate under European Law. While Microsoft is planning to go all-in on its European data center and AI operations, domestic companies are trying to reduce their reliance on American firms due to national security concerns.
Is Microsoft a Good Buy Today?
Microsoft is set to report its third quarter Fiscal 2025 earnings after the market closes today. The Street expects Microsoft to post adjusted earnings of $3.22 per share on revenues of $68.44 billion.
Ahead of the results, analysts remain highly optimistic about Microsoft’s stock trajectory. On TipRanks, MSFT stock has a Strong Buy consensus rating based on 26 Buys and three Hold ratings. Also, the average Microsoft price target of $477.75 implies 21.2% upside potential from current levels. Year-to-date, MSFT stock has lost 6.3%.
