Jane Lanhee Lee, Danielle Kaye

NEW YORK (Reuters). – Following a short scare Microsoft Corp Technology investors received a reassuring message late on Tuesday from (NASDAQ): that the enterprise cloud business segment has lots of potential for growth.

After reporting less-than stellar cloud growth, shares fell by as much as 6 percent on Tuesday. They rebounded when Microsoft set a higher growth target than Wall Street’s for the current quarter. This erased any earlier losses and allowed them to trade at 3% more than the closing price.

According to data from Refinitiv, executives for Microsoft’s Intelligent cloud unit forecast revenue of $18.75-$19 billion in the third quarter. This compares with $18.15 billion Wall Street consensus.

Aptus Capital Advisors Portfolio Manager David Wagner stated that “we believe this could start to change sentiment tide in tech.” He said that Microsoft’s guidance was solid and reliable and could help to ease Wall Street worries about tech earnings power.

Tech investors were worried that the growth of the cloud industry, which is one of the most robust in the tech sector segments, would slow down in December’s quarter.

Microsoft’s optimistic outlook, in addition to its beatable revenue estimates for the second quarter, has helped fight back against a backlash that led to price volatility.

Thill, a Jefferies analyst said that cloud acceleration and the commercial bookings made by Amy Hood, Microsoft Chief Financial Officer Amy Hood helped save the Nasdaq.

Thill said that Microsoft Azure’s top cloud service, Azure, is experiencing constant currency growth. This coupled with high demand will be reflected in future financial reports by Alphabet (NASDAQ) Inc and Amazon.com Inc.

Analyst Mark Moerdler, Bernstein: “I believe investors should be confident. You saw it in the rebound of the stock following management commentary and guidance.”

Moerdler stated that projected Azure growth confirms the strength and sustainability of cloud growth.