Microsoft's accounting change regarding data center leases is misleading; rising Treasury yields create a funding cost problem for the company.

Most of you probably don't know that Microsoft just kind of secretly or tried to be a little secret about it, kind of sweeping under the rug, changed their accounting techniques.

It says the accounting change adjusted the software giant's CapEx expectations to about 175 billion down from 190.

Microsoft is spreading the cost of the data centers. Now, they This is a little misleading because they say the cost of the data centers. What they're really referring to are these leases that Microsoft is having to pay.

But what's happening is they're taking these leases that they have for leasing all of these data centers. I'm talking about Microsoft. And they were putting them into CapEx, but now they're saying, "Actually, we're going to go ahead and reclassify that."

And what they're reclassifying it as takes it from a balance sheet item into a P&L item.

So, if you're an investor as an example, and you can get 8% on a 10-year Treasury yield, well, there's no way you're going to lend to Microsoft at 9%. You're going to lend to them at 10%, 11%. You see, that's where we get into a problem.