Microsoft on Wednesday forecast disappointing growth in its cloud computing business, sending its shares down 4.5% in after-hours trading as investors worry about big spending, elusive artificial intelligence revenue and competition from cheaper AI models from China.

Microsoft CEO Nadella expects a growth rate of 175 percent with AI business alone. The current figures are solid, but the outlook is weaker.

Microsoft shares fell 3.5 per cent in premarket trading on Thursday after the company issued a downbeat forecast for its cloud business, while Meta rose 2.6 per cent after beating quarterly revenue estimates.