Microsoft has become the latest Silicon Valley giant to be punished by investors amid a surge in artificial intelligence spending, as its shares moved lower after its quarterly earnings failed to meet Wall Street’s lofty expectations.
The disappointment in the face of double-digit sales and earnings growth highlighted the intense scrutiny being placed on the fast-developing technology and its perceived importance for bolstering Big Tech’s fortunes.
Despite continued strong sales at Microsoft’s closely watched cloud division, the Seattle-based company said on Tuesday that Azure growth had slowed slightly during the three months to June 30 to 29 per cent year on year, down from 31 per cent in the previous quarter. Microsoft said this was due in part to demand for AI outstripping its capacity.