Microsoft downgraded its Intelligent Cloud revenue guidance and reorganized AI-related cloud businesses, including moving Microsoft 365 components to Productivity and Business Processes and relocating Copilot Pro under Personal Computing; shares declined after hours.
Microsoft Corp (NASDAQ:MSFT) shares were slightly lower in Wednesday’s afterhours deals, after the company downgraded guidance for its Intelligent Cloud business.
The segment is now expected to generate revenues of $23.8 billion and $24.1 billion, a decrease from a prior estimate of $28.6 billion to $28.9 billion.
It reflects slower growth in the cloud business.
Microsoft, meanwhile, said it anticipates that revenues from its AI services will see accelerated growth in the latter half of fiscal 2025.
At the same time, Microsoft announced a structure of its business units – shuffling some of its AI-related cloud businesses.
Specifically, Microsoft said that it has moved some commercial components of Microsoft 365 under its Productivity and Business Processes segment. Also revenue from Copilot Pro, an AI productivity tool, will now be under its Personal Computing segment, which includes search and news advertising.
Microsoft shares were down $1.59 or 0.37% to $422.55 in Wednesday’s afterhours dealing.
