Capital expenditure is money spent to buy, build or upgrade long-term assets such as data centers, factories and networks. It appears in the cash flow statement and then reaches the profit statement gradually, through depreciation.
Capex shows where a company is placing its bets. Heavy spending can depress free cash flow today and add capacity for tomorrow, and the payoff depends on demand. The mix also matters, because short-lived assets such as servers wear out faster than buildings.
Microsoft's capital expenditure was $45.2 billion in the quarter to September 2026, up 30%, with about three-quarters going to short-lived assets such as CPUs and GPUs. It guided to more than $50 billion for the next quarter and said spending would accelerate in the second half of its fiscal year, partly because CPUs cost more with higher memory and storage prices. SK hynix said its 2027 capital expenditure would rise significantly for the first Yongin fab and for leading-edge equipment, and that it will open clean rooms in phases to match demand.
Read capex alongside revenue growth and free cash flow, and separate growth spending from replacement spending.