Microsoft shares rebound after debunking weak AI sales

Microsoft shares recovered Wednesday after the company disputed a report that claimed it had reduced sales quotas for new AI software. Microsoft spokesman said the company did not cut quotas. The Information also revised the headline on its story, shifting the focus to lowered growth targets for newer AI products. A note from Mizuho’s Klein said the report appeared backward looking and not incrementally negative.

The stock had fallen earlier in the session after Bloomberg flagged the original report from the Information. The article cited two salespeople in Microsoft’s Azure cloud unit who said the company reduced expectations for how quickly customers would adopt new AI products known as agents. The salespeople said many teams had missed sales-growth goals in the fiscal year that ended in June. They added that lowering quotas for specific products was unusual.

Corporate customers have raised concerns about the difficulty of measuring cost savings from AI tools. Some also said the technology does not perform consistently in certain tasks. Those issues have influenced how companies evaluate returns from deploying AI systems.

According to the Information report, several Microsoft divisions reduced targets for growth in sales of certain AI offerings after sales staff failed to meet prior goals. The adjustments reflect resistance among some customers to pay more for new AI capabilities. Even so, AI investment has remained a significant driver of Microsoft’s business, supported by spending from AI firms and demand for the company’s software.

The initial news triggered a sharp drop in Microsoft shares and a sudden decline in U.S. equity futures. S&P 500 futures fell about 40 points after the report circulated. Microsoft’s stock later rebounded from session lows, narrowing its decline to less than 1 percent from pre-report levels.

Microsoft’s denial eased market pressure following the rapid reaction to the earlier claims.