Nvidia Shares Gain on Report of Major Microsoft Data Center Expansion

Nvidia Corp. (NASDAQ:NVDA) shares rose modestly in after-hours trading Thursday after a report detailed Microsoft's (NASDAQ:MSFT) ambitious plans to significantly expand its data center infrastructure. The potential build-out signals massive, long-term demand for the high-performance chips that power artificial intelligence and cloud services.

Microsoft's Growth Blueprint

According to a report from Bloomberg, which cited people familiar with the plans, Microsoft intends to dramatically increase its data center capacity over the next eight years. The expansion is a direct response to a computing shortage that has reportedly forced the company to turn away some potential AI and cloud business.

Key details from the reported roadmap include:

• Current Capacity: Approximately 12 gigawatts.
• Target Capacity: An increase to more than 38 gigawatts.
• Timeline: To be achieved by 2032.

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This planned capacity, which includes both company-owned and leased facilities, would represent an energy consumption level greater than that of New York state during peak periods. The sources cited by Bloomberg cautioned that the long-term plan could be altered by shifts in technology or customer demand.

Implications for Chipmakers

The news has positive implications for key suppliers in the AI hardware ecosystem, particularly Nvidia. Microsoft is one of the world's largest buyers of AI processors, and a tripling of its computing infrastructure would translate into sustained, large-scale orders for GPUs and other essential components.

Following the report, Nvidia's stock edged up 0.5% in after-hours trading. The planned expansion underscores the immense capital investment required by major technology firms to compete in the AI race. Microsoft's capital expenditures reached $145 billion in its most recent fiscal year, and analysts anticipate that spending will continue to climb as it builds out its AI capabilities.