Topline
Microsoft shares fell by more than 1.7% on Wednesday following a report the tech giant had lowered growth targets for AI product sales, though the firm has denied the report, claiming it shows a “lack of understanding.”
The megacap denied the report, claiming the story shows a “lack of understanding of the way a sales organization works and is compensated.”
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Key Facts
Shares of Microsoft declined by more than 1.7% to around $481.64 as of just before 2:15 p.m. EST on Wednesday afternoon, paring back earlier losses, which were as much as 3% before the company issued its denial.
Less than one-fifth of salespeople in one U.S.-based Azure unit, Microsoft’s cloud computing business, met a sales growth target of 50% for a tool used to build AI applications, and in July, Microsoft lowered the target to 25% growth for the current fiscal year, The Information reported, citing two unnamed salespeople in the Azure unit.
Microsoft denied the report in a statement to Reuters: “Aggregate sales quotas for AI products have not been lowered, as we informed [The Information] prior to publication.”
The company reportedly said the report “inaccurately combines the concepts of growth and sales quotas,” which Microsoft claimed shows a “lack of understanding of the way a sales organization works and is compensated.”
Big Number
$3.5 trillion. That’s Microsoft’s market capitalization as of Wednesday, ranking behind Google parent Alphabet ($3.8 trillion), Apple ($4.2 trillion) and Nvidia ($4.3 trillion), respectively. Microsoft became the second company ever to be valued at over $4 trillion earlier this year, largely driven by the performance of its Azure business, though shares have pared back earlier gains and are now up 15% on the year.
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Source: https://www.forbes.com/sites/tylerroush/2025/12/03/microsoft-shares-drop-after-reportedly-lowering-expectations-for-ai-product-demand/
