Microsoft’s Azure cloud services unit posted a 35% increase in revenue from a year earlier, but growth was slower than some analysts expected in a division that has been one of the company’s bright spots in recent years.
Microsoft shares fell 2% in after-hours trading on Tuesday after the earnings report.
Microsoft shares have fallen more than 25% since the start of the year amid a broader market decline as rising inflation, geopolitical uncertainty over the war in Ukraine and more macroeconomic headwinds continue to wreak havoc on the tech industry.
“In this environment, we are focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined manner,” said Satya Nadella, Microsoft’s CEO, in a statement announcing the quarter on Tuesday. profits
Haris Anwar, senior analyst at Investing.com, called Microsoft’s earnings report a “mixed bag” in a comment after the results were released on Tuesday.
“It shows that Microsoft is weathering the economic storm better than other tech players and that its diversified business model is playing a big role in that,” Anwar said. But he added that the slowing growth of cloud computing was cause for concern.
“If this deceleration in growth continues, it could damage an investment case in the company’s stock, which is considered a safe haven amid market turmoil, as such concerns send the company’s shares down in extended trading,” Anwar said.