Microsoft Stock Slips as "Hesitant" Clients Reportedly Force Cuts to AI Sales Goals

Microsoft Corp (NASDAQ:MSFT) shares are slipping following reports that the tech giant has lowered its sales targets for artificial intelligence software, as clients are hesitant to buy the new tools.

Azure salespeople described the move as rare, noting that the company seldom lowers quotas for specific products, Reuters cited the Information.

Benzinga reached out to Microsoft investor relations for their take on the report and is awaiting their response.

Also Read: Microsoft Builds Massive AI ‘Super Factory’ In Atlanta To Power OpenAI And Elon Musk’s xAI

This development highlights the tension between massive spending and actual usage.

Recently, Microsoft CEO Satya Nadella dismissed the idea of fully autonomous AI companies as “far-fetched,” arguing that humans must remain central to operations to build and maintain critical systems.

He envisioned a future defined by “macro delegation,” where workers assign broad tasks to AI agents and manage them through a new type of inbox.

While he agrees productivity will skyrocket, Nadella insisted that human agency will continue to steer the technology.

Nadella also warned that the AI industry is straining the electric grid and must earn its “social permission” to consume energy by proving it generates broad economic value rather than just enriching a few tech giants.

He argued that the sector risks heading down a “road to nowhere” if returns remain concentrated, though he remains confident in the technology’s long-term trajectory.

The $3.6 trillion tech giant gained over 13% year-to-date trailing the NASDAQ Composite Index’s 21% returns.

Microsoft beat Wall Street expectations for the first quarter, posting $77.7 billion in revenue—an 18% increase—and earnings of $4.13 per share.

Azure revenue jumped 40% and total cloud revenue reached $49.1 billion.

CEO Satya Nadella highlighted that aggressive investments in AI and cloud infrastructure are fueling this growth.

Despite the strong performance, the stock fell 3% in after-hours trading as investors awaited specific forward-looking guidance from the conference call.

It spent nearly $35 billion on capital expenditures last quarter alone.

Microsoft expects second quarter revenue of $79.50 billion-$80.60 billion compared to the analyst consensus of $80.27 billion.

MSFT Price Action: MSFT stock traded 2.66% lower to $477.22 at last check on Wednesday.

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