Tech giant Microsoft beat analysts’ estimates on earnings and revenue in its fiscal fourth quarter but saw weaker-than-expected growth in its cloud business. This didn’t sit well with investors, and the company’s stock took a 7% hit at one point in after-hours trading before slightly rebounding.
Microsoft reported $2.95 in earnings per share (EPS) and revenue of $64.7 billion, an improvement on $2.69 EPS and $56.2 billion in revenue for the same period of last year. The analysts expected $2.94 EPS and $64.5 billion in revenue.
The company’s cloud business brought in $36.8 billion in revenue, meeting the expectations of analysts, but its Intelligent Cloud division came short at $28.5 billion versus the estimates of $28.7 billion. Additionally, revenue from cloud services jumped 29% for the quarter, while analysts predicted a 31% growth.
Intelligent Cloud, which includes the cloud computing platform Azure and relies heavily on artificial intelligence solutions, is Microsoft’s biggest source of revenue.
“Our strong performance this fiscal year speaks both to our innovation and to the trust customers continue to place in Microsoft,” Microsoft CEO Satya Nadella said in a statement. “As a platform company, we are 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’s stock closed at $422.92 per share on Tuesday, marking a 14.03% jump year-to-day. In extended trading, the company’s shares fell all the way down to $391.00 at one point before bouncing back to $407.40.