Reporting quarterly earnings Wednesday afternoon, it will be tough for Microsoft to avoid the issue of the AI breakthroughs from China's DeepSeek that are shaking up the tech world and the stock market this week.

Investors already wanted to see what companies like Microsoft Corp. and its Big Tech peers plan to spend on artificial intelligence, and how those investments are working for the businesses so far.

Microsoft and its Big Tech cohort are investing tens of billions of dollars in the data centers and infrastructure needed to train and deploy AI software across their various services. But China’s DeepSeek upended the general thinking that developing AI models requires the use of the most powerful,

Microsoft has spent months touting a rebound in its Azure cloud business and its quarterly revenue forecast on Wednesday will show whether billion-dollar bets on artificial intelligence are propelling increased growth in its main profit engine.

When Microsoft (MSFT) posts second quarter results on Wednesday, investors will be looking at Azure cloud service growth, along with insights on the tech giant’

Microsoft’s stock has badly lagged its tech peers in the past year as cloud growth has been basically stagnant in recent quarters.