Microsoft is reportedly considering legal action against Amazon and OpenAI over a US$50 billion cloud agreement , escalating tensions in the rapidly evolving artificial intelligence (AI) infrastructure race. Dispute Centres on Cloud Exclusivity At the core of the dispute is whether Amazon Web Services (AWS) can host OpenAI’s new commercial offering, “Frontier,” without breaching Microsoft’s exclusive cloud partnership with the AI firm. Microsoft’s agreement requires that access to OpenAI models be delivered via its Azure cloud platform , making any potential AWS involvement a possible contractual violation . The reported deal could significantly reshape the competitive landscape in cloud computing and AI services , where exclusivity and infrastructure control are key strategic advantages. High Stakes in the AI Infrastructure Race The potential legal challenge underscores intensifying competition am...
Capital A Bhd may face a delay in exiting PN17 status, with analysts now expecting the upliftment timeline to shift to August 2026, instead of the earlier May–June target.
PN17 Exit Hinges on Profitability Track Record
Despite completing the disposal of its aviation business in December 2025, Capital A must still deliver two consecutive profitable quarters to meet Bursa Malaysia’s PN17 exit requirements.
According to Maybank Investment Bank, the group may not be able to rely on its 4QFY2025 results, and instead will likely need to demonstrate profitability in 1QFY2026 and 2QFY2026.
Management is reportedly seeking a regulatory waiver to use historical profits, though approval remains uncertain.
Impact from AirAsia X Valuation Decline
The ongoing Middle East conflict and rising fuel costs have affected the valuation of AirAsia X Bhd, in which Capital A holds a 20% stake.
AAX shares have fallen about 39% since the start of the war, recently trading near RM1.19, pressured by surging jet fuel prices.
While this decline does not impact Capital A’s income statement, it reduces shareholders’ equity. However, the group confirmed equity remains positive at approximately RM610 million (107% of share capital), avoiding further PN17 triggers.
Core Businesses Show Resilience
Operationally, Capital A continues to demonstrate resilience.
The AirAsia MOVE platform is benefiting from higher airfares, driving stronger commission income
Its logistics segment has successfully passed on higher fuel costs via surcharges without affecting volumes
The company is maintaining its FY2026 guidance, targeting:
Revenue: RM3.8 billion
EBITDA: RM600 million
Net profit: RM266 million
Analysts Remain Bullish
Despite the delay, analysts remain positive on the stock.
Both Maybank IB and MBSB Research maintained “buy” ratings, with target prices of 75 sen and 77 sen, respectively, implying significant upside from current levels (~44 sen).
Investor Takeaways
Capital A’s PN17 exit is likely delayed to August 2026, pending two consecutive profitable quarters.
Weakness in AirAsia X shares impacts equity, but does not affect earnings directly.
Core segments, including AirAsia MOVE and logistics, are showing strong resilience despite higher fuel costs.
The company is maintaining solid FY2026 earnings guidance, signalling confidence in recovery.
Analysts remain bullish with upside potential, even after adjusting for lower AAX valuation.
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