Microsoft Shares Drop on Disappointing Cloud Growth Forecast
- Data center capacity crunch is constraining shift to AI
- Results follow strong performance from cloud rival Google
This article is for subscribers only.
Microsoft Corp. shares dropped the most in two years after the software maker forecast slower quarterly cloud revenue growth, reflecting the company’s struggle to bring data centers online fast enough to keep up with demand for artificial intelligence services.
Sales from the closely watched Azure cloud-computing business will rise 31% to 32% in the current period, Microsoft executives said Wednesday on a call following its first-quarter earnings report. Azure revenue posted a 34% gain for that period, adjusted for currency fluctuations, which was a slight deceleration from the 35% growth a quarter earlier.