Microsoft shares sink after slow growth in business 

Microsoft Shares: The firm’s $56.2bn earnings exceeded Wall Street expectations, but slowing growth for cloud service Azure proved to be a dampener.

Microsoft shares tumbled on Tuesday as the firm reported a slowdown in the growth of parts of its business, despite its different investments in AI, including its alliances with OpenAI and Meta.

The tech company surpassed Wall Street expectations with $56.2bn in income, but its latest profits report showed slowing income growth for its cloud service Azure. Earnings from Azure only rose 26% in the fourth quarter of the year, compared with 27% in the last quarter.

Microsoft’s profits report comes at a closely watched moment in the AI arms race. Tech companies have seen their valuations soar as rapid investments in AI-powered technology – such as Microsoft’s revamped Bing search engine chatbot – come to fruition. Many see this quarter as a test of whether tech businesses can succeed in those commitments.

Also read: Lloyds bank profit drops as interest rates rise 

The firm has made a few announcements in the last few weeks that have strengthened the company’s position in the closely watched space.

“Organizations are asking not only how – but how fast – they can apply this next generation of AI to address the biggest opportunities and challenges they face – safely and responsibly,” said Satya Nadella, Microsoft’s chairman and chief executive officer, in a release revealing the profits. 

“We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend and driving operating leverage.”