Microsoft's (NASDAQ: MSFT) stock price plunged more than 6% following its FQ2 earnings report and broke the uptrend, but it doesn’t matter. The results were strong, and the long-term opportunity offsets the weak guidance. The critical detail in the report is the accelerating growth of AI services.
The acceleration underpinned its cloud segment even as Azure's growth slowed and affirmed the long-term AI outlook. That includes a services boom that is bigger and longer-lasting than the infrastructure boom underway. The forecast for AI services industry growth is robust and continues to rise, expecting a 36% CAGR over the next seven years or longer.
