Microsoft's stock price dropped to $404 during Wednesday afternoon trading, down 2.2% from a previous close of $413. The decline comes as the company explores high-temperature superconductors to improve energy efficiency in its global data centers.
The technology giant is evaluating high-temperature superconducting cables for data center power systems, according to a company blog post. HTS materials conduct electricity with zero resistance, significantly reducing energy loss compared to traditional copper wires.
These cables are also lighter and more compact, potentially redefining how Microsoft designs electrical rooms and hardware layouts.
Microsoft's stock performance contrasts with its financial results. The company reported a 10% profit rise in its fiscal second quarter, with AI product revenue reaching a $13 billion annual run rate, up 175% year-over-year, according to its official earnings conference call. Azure cloud platform grew 38% in constant currency, ahead of company forecasts.
Yet shares fell as much as 12% following the earnings report, erasing $357 billion in market value.
The market reaction reflects investor concerns about capital expenditures. Microsoft's spending reached a record $22.6 billion last quarter as the company builds data centers to meet AI demand amid ongoing discussions about AI chip tariffs. High-temperature superconductor adoption requires additional investment, with HTS tape components made from rare-earth barium copper oxide materials concentrated in China.
Data center electricity consumption has become a critical issue. A 2024 report found Microsoft and Google's combined power usage surpassed that of over 100 countries. Local communities near data centers face challenges including higher electricity bills, a concern that other AI companies like Anthropic have pledged to address, reduced water access, and pollution concerns.
Microsoft aims to address these issues through multiple approaches. The company plans to work with energy companies on long-distance HTS power lines, potentially bypassing regulatory hurdles across jurisdictions.
Last month, Microsoft announced "Community-First" AI infrastructure designed to minimize local impacts while creating jobs.
High-temperature superconductors have seen limited industry adoption due to complexity and cost. However, most manufactured HTS tape currently supports fusion research, contributing to price reductions.
Compared to overhead transmission lines requiring 70-meter rights-of-way, HTS cables may need only 2 meters of clearance.
Investor confidence in Microsoft's stock will depend on how the market responds to technological advancements, cost control measures, and quantifiable savings from efficiency improvements. The company continues to balance massive AI infrastructure investments against operational effectiveness and community relations.
