Reuters Microsoft said it would spend more money this fiscal year to build out AI infrastructure even as growth slowed in its cloud business, another sign the payoff from hefty investments in the technology may take longer than Wall Street had hoped.

Shares fell 7 on the spending forecast but pared losses to trade down 4 after the bell on Tuesday after Microsoft said on a postearnings call that Azure cloud growth would accelerate in the second half of fiscal 2025.

Big technology companies have been pouring billions of dollars into data centers to capitalize on the generative AI boom. Googleparent Alphabet warned last week that its capital spending would stay elevated for the rest of the year.

Microsoft said its capital spending rose 77.6 to 19 billion in its fiscal fourth quarter that ends June 30, with cloud and AIrelated spending accounting for nearly all of the expenditures. For all of fiscal 2024, capital spending totaled 55.7 billion.

Group CFO Amy Hood said the spending was necessary to support demand for AI services and the company was investing in assets that will be monetized over 15 years and beyond.

Still, investors who have run up Microsoft stock by nearly a quarter in the past 12 months on AI optimism were disappointed with the Azure growth.

Microsoft predicted that the business would grow 28 to 29 on a constant currency basis in the JulySeptember quarter, compared with estimates of 29.7, according to Visible Alpha.

That followed a 29 rise in the…