Knowing must come before owning. Many passive investors (not to be confused with passive-income investors) just own Microsoft (NASDAQ:MSFT), but they don’t really know what the company is doing. Microsoft is spending billions of dollars on something surprising. With the full story, you may adjust your strategy with Microsoft stock.
Certainly, some people are only invested in Microsoft because a fund manager told them to do that. Maybe they’re just seeking AI exposure, which is understandable. Microsoft is investing in other areas, including renewables. You probably didn’t expect that, so continue reading to get the complete picture about Microsoft.
Microsoft to Spend Billions on Asia Tech
If you’re not a fan of “pay today for growth tomorrow,” then the following three news items about Microsoft might bother you. As it turns out, Microsoft plans to spend billions of dollars on technology in several Asian regions.
First, Microsoft will invest $2.2 billion during the next four years on cloud-computing and AI infrastructure in Malaysia. Along with that, Microsoft will work with Malaysia’s government to establish a national AI center.
Similarly, Microsoft plans to invest invest $1.7 billion in Indonesia during the next four years. Just like in Malaysia, Microsoft’s objective in Indonesia is to build new cloud and AI infrastructure there.
Microsoft will establish a data center in Thailand. The purpose of this data center will be to address the demand in Thailand for cloud and AI services. This will certainly involve a substantial financial outlay, as Microsoft CEO Satya Nadella stated that the company would commit to training approximately 100,000 people in Thailand in AI.
Microsoft Delves Deeply Into Renewables
There’s a good chance that you didn’t know Microsoft is going on a tech-spending spree in several Asian regions. And now, here’s another thing you probably didn’t know. Interestingly, Microsoft is making a major investment in renewables (i.e., renewable energy sources).
Here’s the lowdown on this surprising story. Reportedly, Microsoft agreed to purchase more than 10.5 gigawatts of renewable-energy projects from Brookfield Asset Management (NYSE:BAM) and its affiliate, Brookfield Renewable.
This is a five-year agreement (2026 to 2030) that reportedly supports over $10 billion worth of future developments in developing renewable energy capacity. The types of energy sources that Microsoft will focus on in this arrangement will include wind power and solar power.
Why would Microsoft agree to potentially spend billions of dollars on this? While Microsoft certainly isn’t a renewable-energy business, as MarketWatch pointed out, the company seeks to have all of its electricity consumption matched by zero carbon energy purchases by 2030.”
Bear in mind, Microsoft is going all in on AI technology, and this will require a great deal of energy use. Thus, Microsoft is willing to invest in renewables as regulators may strongly regulate carbon usage in the coming years.
Microsoft Stock: Know What You’re Buying
We’ve discussed Microsoft’s third-quarter fiscal 2024 results and won’t deny that those results are impressive. Microsoft’s earnings performance is the front-page news that people are already well aware of.
At the same time, most investors probably don’t know what Microsoft is spending billions of dollars on. We’re talking about Microsoft pouring billions of dollars into far-away regions of the world. Plus, the company is delving deeply into renewables with a five-year agreement.
The point here isn’t to dissuade you from owning Microsoft stock if that’s what you want to do. Just understand what you’re exposing your portfolio to, and don’t only read the front-page headlines.
If you’re not fully on board with Microsoft’s major investments, you can simply reduce your position in the stock.
On the date of publication, Louis Navellier had a long position in MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.