Microsoft Stock Rises as $678 Billion Backlog Supports AI Spending

Australia passed a law imposing a 2.5% levy on tech giants' advertising revenue if they don't pay local media for news content. The law targets Meta, Google, TikTok, and Microsoft's LinkedIn, with offsets for deals with publishers. The government aims to support Australian news outlets.

Microsoft will end its license-included Azure VMware Solution (AVS) by October 2026, requiring customers to acquire Broadcom's VCF licenses and transition by August 2027. Broadcom focuses on selling its full VCF suite, not standalone products. Microsoft advises customers to plan their migration to avoid service disruption.

Microsoft's Xbox division plans to cut 3,200 jobs by mid-2027, with 1,600 already eliminated. Unionized employees protested, citing frequent layoffs since Microsoft's acquisition of Bethesda. Developers claim layoffs harm game quality and institutional knowledge. The CWA filed an unfair labor practice complaint against Microsoft.

IREN Limited's stock fell 6.46% to $42.00 despite delivering its first AI data center to Microsoft. The 50MW Horizon 1 deployment is part of a $9.7B contract with Microsoft through 2031. The decline coincided with a broader pullback in AI-infrastructure and high-beta tech stocks, highlighting the company's sensitivity to sector sentiment. IREN's shares have high volatility, with a beta of 4.2, and remain exposed to both Bitcoin and AI market fluctuations.

Microsoft issued a patch for a critical Copilot vulnerability in the personal version, nearly eight months after confirmation, according to Microsoft and Varonis. Varonis reported the CoSnitch flaw, involving auto-execution, data exfiltration, and persistent memory poisoning. Microsoft said customers are protected and no action is needed.

Microsoft faces setbacks in China as authorities accelerate plans to remove a customized version of Windows 10 from state-linked organizations, citing data-security concerns. The move aligns with China's push for domestic tech alternatives. Microsoft reported $90B in fiscal Q4 revenue, with cloud and AI businesses driving growth. Investors watch for potential expansion of localization efforts into Azure and AI services.