Microsoft shares dropped more than 5 percent in after-hours trading after the company slightly missed expectations for its cloud computing business.
Sales from Microsoft's cloud business, including Azure, grew 19 percent to $25.5 billion in Q4 2020, slightly below projections.
The company expects to face capacity constraints in servicing AI demand in the coming quarter, impacting Azure contract growth.
Microsoft's share price remains above the recent Wall Street AI reckoning, despite questions surrounding a Chinese start-up's AI chatbot outperforming Microsoft-backed models.