Microsoft shares sagged on reports of weak sales forecasts for AI products

Shares of cloud services provider and software developer Microsoft fell by more than 3% in trading on Wednesday after The Information reported that several divisions of the tech giant had lowered their sales growth forecasts for a number of artificial intelligence products. The reason for the revised expectations, according to the publication, was that many of the company's sales staff failed to meet the target in the fiscal year that ended in June. Microsoft denied the publication of the insider technology portal, which led to a partial recovery of the company's share prices.

According to The Information's sources, the lag in sales plans was seen for Foundry's product, an Azure-based platform for enterprise customers that allows them to create and manage AI agents. Adoption of such agents, which perform routine tasks instead of humans, in traditional businesses is not moving as fast as in other segments of the AI industry, the publication explains.

In the end, according to The Information, Foundry's 50% sales growth target was achieved by less than a fifth of salespeople in one of Azure's U.S. divisions. In another division, the target was initially set to double sales, but after most employees failed to meet the target, it was lowered to the same 50%.

The Information also recalled Carlyle Group's experience in 2023: the private equity firm found that Microsoft's AI tools couldn't consistently pull data from other apps, causing Carlyle to cut back on its use of the product.

A Microsoft spokesperson told CNBC that the company has not lowered targets for its sales force. After this statement, Microsoft's securities recovered part of the fall and at the time of publication are trading 1.5% below the closing price on December 2.

U.S. tech giants are under pressure from investors to prove that multi-billion-dollar investments in AI infrastructure are starting to pay off, Reuters writes. "This report [The Information] shows that the industry is only in the early stages of AI adoption," D.A. Davidson analyst Gil Luria told the agency. - That doesn't mean AI products can't improve companies' efficiency - just that it may be more difficult than many have realized."

In October, the software developer said it spent a record $35 billion on infrastructure expansion in the first quarter of fiscal 2026 and warned that spending would continue to grow. Nevertheless, the investments are already yielding results: in July-September, revenue from Azure's cloud division grew 40% year-over-year - better than analysts' forecasts, Reuters recalls. The company's forecast for the second quarter also exceeded Wall Street's expectations.

The bet on AI helped Microsoft this year to become the second company in history whose capitalization exceeded $4 trillion. The first was AI chip maker Nvidia. Microsoft's capitalization now stands at $3.6 trillion: the stock is down almost 13% from its July high.

This article was AI-translated and verified by a human editor