Microsoft's Azure cloud revenue growth of 40% falls short of investor expectations; shares drop more than 2% as Google Cloud posts 63% growth.

Azure revenue jumped 40% in the quarter, matching consensus estimates but only slightly faster than the previous quarter's 39% growth. By contrast, Google Cloud posted 63% revenue growth, exceeding estimates for 50.1% growth.

M365 Copilot, Microsoft's $30 per month AI assistant for businesses, added 5 million users to reach 20 million (up from 15 million in January). Microsoft reported an AI run rate of $37 billion, measuring expected revenue from infrastructure sales to third parties and its own AI offerings over the next year.

Investors expressed concern that the results did not reassure the market amid questions about Microsoft's AI infrastructure spending and its reliance on OpenAI, with analysts noting the company needed stronger numbers to restore confidence in its competitive position.