Will Microsoft report a company-wide gross margin percentage for the quarter ending June 30, 2027 that is at least 100 basis points above the same quarter of fiscal 2025, as disclosed in its SEC filings?

The case against it

Tight compute supply combined with declining token pricing, so compressed margins or reduced investment returns for AI model developers. Introduction of real inference costs that scale with customer usage instead of marginal cost approaching zero, so traditional J-curve where customer lifetime value rises with retention no longer holds; retained customers become more expensive to serve, compressing margins. It would show first if hyperscaler gross margin percentage declines year over year while AI revenue grows, with management citing inference cost or depreciation.

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