Jan 24 Reuters Microsoft Corp posted results on Tuesday that showed some strength in the face of a weak economy, buttressed by a cloud business that hit Wall Street targets for the end of 2022, but it may miss expectations in the current quarter.

The relatively stable outlook helped assuage fears that the lucrative cloud segment for big tech companies could be hit hard as customers look to cut spending, and cloud revenue in the fiscal second quarter reported on Tuesday made up for some weakness in the PC unit.

The small miss on Microsofts cloud earnings forecast is likely just a reflection of the new economic reality that businesses are facing and not a harbinger of something worse, said Bob O39;Donnell, chief analyst at TECHnalysis Research.

Microsoft39;s shares rose 4 initially after the results before reversing course to slip 1 to 239.58 in afterhours trade. The stock has fallen 18 in the past 12 months.

Microsoft joined other big tech companies in turning to layoffs to ride out harder times, announcing last week it was cutting over 10,000 jobs. It posted fiscal secondquarter earnings exceeding Wall Street39;s estimate.

It forecast thirdquarter revenue in its socalled intelligent cloud business would be 21.7 billion to 22 billion, just below the analyst average forecast of 22.14 billion, according to Refinitiv. In the second quarter revenue from that segment beat expectations slightly at 21.5 billion.

The cloud business is under the spotlight again following the…