This article first appeared on GuruFocus.
Microsoft (NASDAQ:MSFT) shares slid about 10% on Thursday morning after the software giant posted fiscal second-quarter results that came in above Wall Street expectations.
For the quarter ended Dec. 31, Microsoft reported adjusted earnings of $4.14 a share as revenue rose 17% year over year to $81.27 billion. Analysts had forecast earnings of $3.91 a share on revenue of $80.31 billion.
Growth remained centered on cloud demand. Revenue from the Intelligent Cloud segment climbed to $32.91 billion, driven by Azure, which posted revenue growth of 39% year over year, or 38% in constant currency. The company had earlier guided for Azure growth of about 37% in constant currency.
Total cloud-related revenue reached $51.5 billion during the quarter.
Productivity and Business Processes revenue rose to $34.12 billion, topping expectations. The segment saw steady growth across Microsoft 365 commercial and consumer subscriptions, LinkedIn, and Dynamics 365.
Revenue from the More Personal Computing segment, which includes Windows, Xbox, and Surface, edged lower than forecasts at $14.25 billion.
Microsoft said demand for artificial intelligence-related services continued to expand, though investors appeared focused on valuation and growth sustainability following the results.