Microsoft’s Azure slowdown offsets optimism about AI growth; shares down 3%

Microsoft Corp. posted tepid quarterly sales growth and forecast a continued slowdown in its Azure cloud-services business, overshadowing optimism about customer interest in new artificial intelligence-powered products. Shares were down about 3% Wednesday morning in New York.

While overall results in the period ended June 30 topped analysts’ projections, Azure revenue growth slipped to 27%, excluding currency impacts, from 31% in the previous quarter. The world’s largest software maker projected that Azure gains would slow further in the current quarter, and said it would boost spending to expand data centers for new cloud services — while expecting only a gradual increase in AI revenue.