Shares fell 7% after the company gave the spending forecast on a call with analysts but quickly pared losses to trade down 3% after it said Azure growth would accelerate in the second half of fisca…
Microsoft predicted quarterly growth for its Azure cloud platform below estimates on Tuesday and said its capital spending would rise this fiscal year, in another sign the payoff in hefty AI investments may take longer than first thought.
The disappointing growth knocked shares of other large tech stocks. Shares of Amazon were down 3.4% and Meta Platforms was down 3% in extended trading as investors feared that the billions of dollars Big Tech was spending on AI infrastructure would provide little return in the short term. Spending by the Windows maker surged in the fourth quarter, with capital expenditure including finance leases rising 77.6% to $19 billion, a big step up from the $14 billion it recorded in the previous three months.
Overall, revenue from its Intelligent Cloud unit – home to the Azure cloud-computing platform – rose 19% to $28.5 billion in the fourth quarter, missing analysts’ estimates of $28.68 billion, LSEG data showed.
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