Microsoft’s July 29, 2026 guidance for fiscal Q1 2027 capital expenditures exceeding $50 billion—below prior analyst estimates of roughly $56 billion—reflects an accounting shift extending data-center useful lives from 15 to 25 years and reclassifying more leases as operating rather than finance leases. Underlying AI infrastructure plans remain unchanged, with Q4 FY2026 capex at $41 billion and calendar-2026 guidance revised to about $175 billion. Strong Azure demand, evidenced by 43% revenue growth and a large commercial backlog, continues to drive the buildout ahead of the October 28 earnings release. Reported figures will incorporate the lease adjustment while actual cash deployment stays elevated.