Skip to content 
Search

Latest Stories

Microsoft shares dip three per cent as cloud growth slows

The slowdown in cloud revenue, which has been a significant driver of Microsoft’s earnings, sparks unease among investors

Microsoft shares dip three per cent as cloud growth slows

MICROSOFT reported strong quarterly earnings on Tuesday (31), with a profit of $22 billion (£17.12bn) on $64.7bn (£50.36bn) in revenue for the recently ended quarter, reflecting growth from the same period a year earlier.

However, the company's shares dipped nearly three per cent to $411.40 (£320.27) in after-market trades, as its crucial cloud computing unit posted revenue of $36.8bn (£28.64bn), falling short of investors' expectations and raising concerns about the sustainability of its growth.


The slowdown in cloud revenue, which has been a significant driver of Microsoft's earnings, sparked unease among investors, leading to the decline in share price.

Despite the overall solid performance, the hint of a potential deceleration in cloud growth was enough to prompt a cautious response from the market.

"While there will be some knee-jerk reaction in Microsoft stock after hours, we believe the takeaways for the broader tech sector is this AI monetisation story is real," Wedbush analyst Dan Ives said in a note to investors.

Microsoft is among the major contenders in the race to build out artificial intelligence systems, pouring billions of dollars into the technology in the hope it will pay off.

Microsoft is keen to monetise generative AI, having moved the fastest to implement it across all its products, and pouring $13bn (£10.11bn) into OpenAI, the start-up stalwart behind ChatGPT.

CFRA Research viewed the earnings results as "largely in line" across Microsoft's core businesses and believes that Microsoft is "incrementally improving" the money it makes from AI, according to senior equity analyst Angelo Zino.

"Still, we acknowledge that the better-than-expected cloud results from Alphabet last week had investors looking for more," Zino said.

Google cloud reports profit 

Google-parent Alphabet reported profit and revenue that beat expectations as its AI-amped cloud and search ads businesses thrived.

Winning the big bet on AI is "crucial" for the group, said Jeremy Goldman of Emarketer, "but the market is willing to give them a level of patience."

The AI frenzy has helped Microsoft's cloud computing business grow in the double digits, which analysts said could be hard to sustain.

Microsoft's big stake in OpenAI along with its own Copilot AI help it maintain a leadership position in AI, according to Emarketer senior analyst Gadjo Sevilla.

Revenue from Microsoft's AI-infused "Intelligent Cloud" unit was $28.5bn (£22.18bn), a 19-per cent increase from the same quarter a year earlier, according to the earnings figures.

Microsoft CEO Satya Nadella said on an earnings call that use of its AI offerings is ramping up, from workplace software to Bing search and Copilot AI relied on by developers.

"I'm energised about the opportunities ahead," Nadella said. "We are investing for the long term in our fundamentals, in our innovation and in our people."

Microsoft's Azure platform drove a strong increase in revenue from server products and cloud services, according to the company.

Nadella said the company is "focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era."

Microsoft reported a net income of $88.1bn (£68.58bn) for its fiscal year on revenue of $245.1bn (£190.81bn), up 22 per cent and 16 per cent respectively.

Money taken in by Microsoft's Xbox video game unit leaped 61 per cent, boosted by the acquisition of Activision, according to earnings figures.

Microsoft said costs to attract visitors to its search and news services rose 19 per cent, as it pressed to compete with Google. (AFP)

More For You

UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Bond yields ease following Starmer’s support for Reeves

THE COST of UK government borrowing fell on Thursday, partially reversing the rise seen after Chancellor Rachel Reeves became emotional during Prime Minister’s Questions.

The yield on 10-year government bonds dropped to 4.55 per cent, down from 4.61 per cent the previous day. The pound also recovered slightly to $1.3668 (around £1.00), though it did not regain all its earlier losses.

Keep ReadingShow less
Gill becomes first Asian captain to score double-century in England

Shubman Gill reacts to reaching his double hundred on day two of the second cricket test match against England at Edgbaston cricket ground in Birmingham, central England on July 3, 2025. (Photo by DARREN STAPLES/AFP via Getty Images)

Gill becomes first Asian captain to score double-century in England

SHUBMAN GILL etched his name in cricket history on Thursday (3), becoming the first Indian and Asian captain to score a double-century in a Test match on English soil as he powered India to a commanding position at Edgbaston.

The 25-year-old skipper scored 269 on the second day of the second Test, having shattered multiple records in a masterful innings that has put England to the sword.

Keep ReadingShow less
The Great British Sewing Bee

Patrick Grant, Esme Young and Kiell Smith-Bynoe return as judges and host

BBC

The Great British Sewing Bee 2025 to return on 15 July, BBC announces

Key points

  • The Great British Sewing Bee 2025 begins Tuesday, 15 July at 9 pm on BBC One.
  • The 11th series will see a new group of amateur sewers compete for the title.
  • Patrick Grant, Esme Young and Kiell Smith-Bynoe return as judges and host.
  • The show continues its popularity with weekly sewing challenges and heartfelt moments.

Great British Sewing Bee 2025 set to return on 15 July

The return date for The Great British Sewing Bee 2025 has been officially confirmed. The popular BBC One competition will be back on screens on Tuesday 15 July at 9 pm, bringing with it a fresh group of amateur sewers hoping to impress judges Patrick Grant and Esme Young.

Now in its 11th series, the show has grown into a mid-year television highlight, offering a combination of creativity, technical skill, and emotional storytelling. Hosted by Kiell Smith-Bynoe, the series follows contestants through a series of themed sewing challenges as they compete for the title of Britain’s best home sewer.

Keep ReadingShow less
Indian soldier

An Indian soldier stands guard as national flags wave in the background

Getty Images

India won the brief conflict with Pakistan but lost the propaganda war

Nitin Mehta

After the dastardly killing of 25 Hindus by terrorists in Pahalgam, India delivered a devastating blow to Pakistan. It sent the message that India will not tolerate terrorist attacks anymore. However, India seems to have lost the propaganda war. In any battle, propaganda plays a huge role.

There are two interpretations of how the brief conflict was suddenly brought to a close. The Indian interpretation is that the Pakistani commanders urged India to stop the conflict and India agreed. This in itself raises some crucial questions. If the enemy is urging you to stop, why would you? Certainly the great Chanakya's response would be to take full advantage of the enemy's weakness. Did India get any cast-iron guarantees that Pakistan will stop state-sponsored terrorist attacks? Did India ask for the immediate release of Sudhir Kulbushan Yadav who is in a Pakistani jail for nine years on false spying charges?

Keep ReadingShow less
Rajnath Singh

The council that approved the initiation of procurement for arms and equipment is headed by Defence Minister Rajnath Singh. (Photo: Reuters)

Reuters

India starts process to procure arms worth $12.31 billion

INDIA’s Defence Acquisition Council (DAC) has approved the initiation of procurement for arms and equipment worth $12.31 billion (£9.05 billion), the defence ministry said on Thursday.

The council is headed by India's Defence Minister Rajnath Singh.

Keep ReadingShow less