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However, Jefferies analysts said in a note Monday that Microsoft executives were "strongly refuting" any change to their data center strategy.
The company is "always tweaking their forecasting of how tight certain regions will be and where investment needs to be prioritized," the analysts continued.
They noted that the company had guided to capital expenditure growth slowing year over year, "so down from the 50% to 60% YoY pace, but still growing."
It is "still too early" to say if the changes in data center capacity are a reflection of softer-than-expected AI demand or oversupply, the analysts wrote. In their view, the changes could be driven by power constraints or better-than-expected data-center efficiency.
"Zooming out, reminder that we are still very much in the early innings of this AI buildout, and not everything will be linear or in a straight line," the analysts continued.