During the September 3 episode of Mad Money, Jim Cramer mentioned Microsoft Corporation (NASDAQ:MSFT) for its unconventional approach to powering hyperscale data centers in partnership with Chevron Corporation (NYSE:CVX). He said:
How about Microsoft? Look, Mr. Softee is getting religion. They’ve realized that by giving us more disclosure on Azure, their cloud infrastructure business, we’ll find more things to like. They’re right. In the end, I come to praise Microsoft CFO Amy Hood, not bury her. They’ve been very clever getting power for the data centers, pumping it right out of the Permian. They got this deal with Chevron as a partner… 2.67 gigawatts. No one’s talking about it. It’s the cleanest behind the meter plan for power I have seen yet. People even, and this is not a stretch, I’m not kidding, people even like Copilot.
Azure Disclosure and the Chevron Energy Partnership
CFO Amy Hood provided Wall Street with a much clearer look at actual cloud demand by breaking down detailed Azure growth metrics and data center capacity constraints. At the same time, enterprise adoption of Microsoft 365 Copilot is moving past initial trials, with major corporations deploying the AI assistant across workforce segments.
A major highlight of the company’s infrastructure strategy is a twenty-year agreement with Chevron Corporation for a proposed 2.67-gigawatt natural gas power plant in West Texas. Designed to supply dedicated off-grid electricity directly to a hyperscale data center in the Permian Basin, the project bypasses regional grid transmission queues to secure reliable power for continuous AI workloads. Microsoft Corporation’s president of Cloud Operations + Innovation, Noelle Walsh, commented:
Our agreement with Chevron helps ensure we’ll have dedicated, large-scale power to support the evolution and reliability of advanced compute. Through this partnership, we’re delighted to grow with and become a deeper part of the West Texas community.
Furthermore, Chevron’s president of New Energies, Jeff Gustavson, remarked:
Chevron is uniquely positioned to deliver power to customers with certainty, speed and at a competitive cost, leveraging Permian natural gas and our proven execution capabilities. This project links Chevron’s traditional strengths to emerging demand, creating differentiated value for our shareholders and the communities where we operate.
Capital Expenditure and Energy Execution Risks
The bear case for Microsoft Corporation centers on the immense financial and operational weight of these infrastructure builds. Microsoft’s massive AI and data center expansion requires significant capital expenditures, while long-term power commitments add infrastructure and execution exposure. In addition, relying on natural gas infrastructure exposes the company to long-term commodity price volatility and evolving environmental regulatory pressures regarding fossil fuel usage for technology operations.
For Chevron Corporation, this venture could also require significant capital allocation into non-core power infrastructure in addition to potential emissions scrutiny and regulatory challenges associated with long-term fossil fuel generation projects.
Smart Money Holdings and Short Activity
According to Insider Monkey’s tracking of over 1,000 hedge funds, 273 hedge funds held a stake in Microsoft Corporation compared to 282 in the previous quarter. Among those funds, Arrowstreet Capital became the company’s largest common stock hedge fund shareholder after increasing its position by 14% in Q2 to nearly 27.66 million shares. Meanwhile, 101 hedge funds had positions in Chevron Corporation in Q2 compared to 103 in the previous quarter. Berkshire Hathaway held the most prominent position in the company among the hedge funds tracked by Insider Monkey with nearly 84.4 million shares. The short percentage of the float sits at 0.92% for Microsoft Corporation and 0.81% for Chevron, representing minimal bearish conviction or short-selling pressure in both equities.
Microsoft Corporation and Chevron Corporation combine accelerating cloud momentum with innovative energy solutions to power the next generation of AI infrastructure. While heavy capital expenditures and project execution risks require close monitoring, Cramer’s commentary highlights how strategic power deals and transparent disclosures reinforce both companies’ long-term market positions.
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