Microsoft touts AI strength , but shares dip as market digests costs

Microsoft beat market estimates for quarterly profit and revenue on Tuesday, as new artificial-intelligence features helped attract customers to its Azure cloud service as they built out their own AI services.

But Microsoft shares were down 1 after-hours as investors absorbed news about rising costs to develop these AI features.

The company forecast operating expenses of $15.8 billion to $15.9 billion in the current quarter, up from $15.4 billion in the previous one. It also said it expects capital expenditures to “increase materially” on a sequential basis.