Investing.com -- Microsoft fell in afterhours trading Wednesday after the tech giant's fiscal second-quarter results beat Wall Street estimates, but growth in its key cloud business fell short of expectations.

Microsoft Corporation (NASDAQ: MSFT ) fell more than 2% in afterhours trading following the report.

For the three months ended Dec. 31, the company announced earnings of $3.23 a share on revenue that grew 12% to $69.63 billion. Analysts polled by Investing.com anticipated per-share income of $3.13 on revenue of $68.92 billion.

Revenue at Azure and other cloud services grew 31% from a year earlier, slowing from the 33% in growth seen in Q1, missing analyst estimates of 31.9%. About 13% of the growth came from AI.

Microsoft said its AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year and the company said it remains "... committed to balancing operational discipline with continued investments in our cloud and AI infrastructure.”

Truist Securities analyst Joel Fishbein highlighted that growth at the tech giant was above their expectations, and AI was a highlight, although Azure came up short.

"We continue to believe that Microsoft has the strongest competitive position in the enterprise software ecosystem from both a financial and technology perspective," Fishbein said. "We believe that there is potential for further acceleration in both top and bottom line growth as AI initiatives scale out in their cloud and Copilot offerings."

(Yasin Ebrahim contributed to the report)