Microsoft beat analysts’ expectations in its latest quarterly earnings report, reporting a 15% increase in revenue year over year on Tuesday. But growth in the company’s flagship cloud-computing service, Azure, fell short of expectations, sending Microsoft shares down as much as 7% in after-hours trading.
The company was expected to report solid growth in its fourth-quarter earnings report, driven mostly by cloud services, with revenue from cloud services growing 29%, up 30% to 31%. Analysts predictedAs a result, stock prices for major technology companies plummeted. Recent market difficulties.
in Microsoft Earnings ReportCEO Satya Nadella sought to boost confidence in the company’s performance.
“This year’s strong performance speaks to both our innovation and the trust our customers continue to place in Microsoft,” Nadella said in the earnings call. “As a platform company, we are now focused on meeting our customers’ mission-critical needs through our platform at scale while remaining committed to leading the way in the era of AI.”
Microsoft has invested billions of dollars in artificial intelligence in recent years as part of a bet that AI-enabled services will dominate the tech industry, and the company has backed ChatGPT developer OpenAI, further cementing its position as a central player in the commercialization of generative AI.
But as the dust settles around AI, questions are growing about whether big tech companies’ shift to AI can deliver the revenue boost they’ve touted.
On the other hand, factors such as speculation about a Federal Reserve rate cut It calmed investors After a long period of AI optimism and rising stock prices, enthusiasm for big tech companies is fading. Tesla and Alphabet shares both fell sharply after releasing their earnings reports last week, and Microsoft shares have fallen from their highs in early July.
Microsoft was also at the center of a global technology outage this month that grounded thousands of flights and caused billions of dollars of disruption across industries after cybersecurity firm CrowdStrike pushed a flawed software update to Windows systems, causing mass crashes and outages.
A much smaller, unrelated outage on Microsoft’s Azure cloud service occurred early Tuesday, causing network connectivity problems in several countries.
