Computers Microsoft makes the stock market nervous with cloud growth

Microsoft's cloud business has recently grown more slowly than expected. After investing billions in artificial intelligence, this made Wall Street nervous, sending the software giant's shares plummeting in after-hours trading.

Microsoft reported a 29% increase in cloud revenues for the past quarter. Market experts had expected a good 30 percent - and in the previous quarter the figure was 31 percent.

The stock market reacts sensitively to even such slight differences, as Microsoft is a pioneer in the business with cloud services and artificial intelligence in particular.

Investors want to see results

The company made an expensive pact with ChatGPT inventor OpenAI and is integrating its technology into all of its products. Access to AI functions is sold on a subscription model. Microsoft is also building expensive new data centers. Investors now want to see that the billions invested in AI are bearing fruit.

Microsoft's CFO Amy Hood said in a conference call that cloud growth will continue to slow down in the current quarter, but will pick up again in the next calendar year. Group CEO Satya Nadella emphasized that the number of professional users of Microsoft's AI functions under the name Copilot had doubled within three months.

Share price recovers somewhat

At the same time, Microsoft attributed eight percentage points of the latest cloud growth to the AI business. In the previous quarter, it had been seven percentage points. All of this made investors a little more conciliatory again: after an initial drop of more than seven percent, Microsoft shares closed after-hours trading on Tuesday with a discount of 2.76 percent.

In other key figures, the Windows group exceeded market expectations. Quarterly sales grew by a good 15 percent year-on-year to 64.7 billion dollars. Analysts had expected an average of 64.5 billion dollars. Profit rose from 20.08 billion dollars a year ago to 22.04 billion dollars.

SDA