Microsoft (NASDAQ:MSFT) shares plunged more than 7% on Wednesday following the company’s reported Q1 results. While both EPS of $2.35 and revenue of $50.1 billion (up 11% year-over-year) came in better than the Street estimates of $2.32 and $49.86 billion, respectively, the guidance was weak and disappointed investors.

The company expects Q2 revenue of $52.85 billion (at the midpoint), suggesting a 2% year-over-year growth. This is worse than the Street estimate of $56.05 billion. Azure growth is expected to slow down to 37% (in constant currency), again worse than the Street estimate of 39.4%.

Analysts at Oppenheimer lowered their Q2/23 EPS by 5% to $2.33, and their 2023 and 2024 to $9.51 and $11.12, respectively, already conservative. In hindsight, pandemic trends have reversed for many companies, and Microsoft faces daunting comps in Windows, Gaming, Devices, as well as margin pressures from the peak, which will temper still strong growth in Cloud and Commercial.