Microsoft's Azure cloud service posted slower quarterly growth, disappointing investors eager to see returns from massive investments in artificial intelligence products, weighing on shares.
The company said in a statement Tuesday that total revenue in the fourth quarter, ended June 30, rose 15% to $64.7 billion, while adjusted earnings were $2.95 a share. Analysts’ average estimates were for sales of $64.5 billion and earnings per share of $2.94.
Cloud computing service Azure reported a 29% increase in revenue in the quarter, down from 31% growth in the prior period. Microsoft shares fell about 7% in after-market trading. The stock closed at $422.92.
CEO Satya Nadella has integrated the company’s product line with OpenAI’s AI technology, including a digital assistant called Copilots that can summarize documents, generate computer code, send emails, and more. The company also sells Azure cloud subscriptions that feature OpenAI products.
In recent weeks, skeptical investors have signaled their impatience with tech companies’ efforts to cash in on their massive investments in artificial intelligence.
Last week, Alphabet shares fell after the company surprised Wall Street with sharply higher costs that overshadowed strong sales.
