Posted by U.S. stock futures are under pressure, with shares of Microsoft (MSFT) dropping 3% after the software giant issued guidance suggesting its Azure cloud business would slow in the next quarters. Shares of other cloud-related companies are lower as well.
on Jan 24, Microsoft (MSFT) shares initially rose over 3% in extended trading after releasing its latest earnings results, but are now 3% lower after officials issued guidance on a conference call suggesting that its Azure cloud business would slow in the next quarters as customers try to save costs.
Microsoft said Azure cloud revenue rose 31% in the fiscal 2023 second quarter, in line with analyst estimates, while its Intelligent Cloud division posted revenue of $21.5 billion, slightly ahead of expectations. Microsoft ended 2022 with 30% of the cloud computing market, up from 20% in 2018. Amazon’s AWS dropped to 55% from 71% during the same period. However, the company’s CFO, Amy Hood, said a slowdown in new business that started in December will likely continue across Microsoft’s commercial business into the current quarter.
The news weighed on shares of other cloud-related companies as well. Amazon (AMZN), MongoDB (MDB), Datadog (DDOG), and Snowflake (SNOW) shares dropped about 3% after Microsoft’s downbeat guidance.
Microsoft’s CFO also said a slump in its Windows products would continue into the current quarter. Sales at Microsoft’s Personal Computing segment, which includes Windows, devices and search revenue, sank 19% to $14.2 billion as the PC market continues to contract.
Microsoft shares are up 1% so far this year.
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