Microsoft beat analysts’ forecasts in its latest quarterly earnings report, revealing Tuesday that revenue rose 15% year-over-year. However, growth in the company’s closely watched Azure cloud computing services missed expectations, and Microsoft shares fell as much as 7% in after-hours trading.
The company was expected to report steady growth in its fourth-quarter earnings report, driven largely by its cloud services. Revenue from those services grew 29%, down from 30% to 31% in the same period. Analysts predictedresulting in a sell-off that exacerbates the Big Tech crisis. Recent market issues.
In Microsoft Earnings ReportChief Executive Satya Nadella sought to bolster confidence in the company’s performance.
“Our strong performance this fiscal year speaks to both our innovation and the trust customers continue to place in Microsoft,” Nadella said in the earnings call. “As a platform company, we are focused on meeting our customers’ critical needs across all of our platforms at scale, while ensuring we lead in the AI era.”
Microsoft has invested billions of dollars in artificial intelligence in recent years, part of a bet that AI-enabled services will dominate the tech industry. And the company backed ChatGPT maker OpenAI, further cementing itself as a central player in commercializing generative AI.
But as the dust settles in the AI sector, there are growing questions about whether Big Tech’s pivot to AI will be able to generate the kind of revenue growth these companies have touted.
Meanwhile, factors such as speculation about a rate cut by the Federal Reserve have… led investors to cool off Their enthusiasm for big tech companies follows a long period of optimism about AI and rising stock prices. Share prices of Tesla and Alphabet fell sharply following the release of their earnings reports last week, while Microsoft’s share price has fallen from the high it reached in early July.
Microsoft was also at the center of this month’s global tech service outage that led to thousands of grounded flights and billions of dollars in disruption across industries. Cybersecurity firm CrowdStrike caused the outage by pushing a faulty software update to Windows systems, causing them to crash en masse.
A much smaller, unrelated outage hit Microsoft’s Azure cloud service earlier on Tuesday, causing network connectivity issues in several countries.
