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2025-12-03T17:14:45.755Z
- Microsoft shares fell on Wednesday after reports that the company was having trouble selling its AI tools to customers.
- According to The Information, the tech giant is rethinking its AI strategy.
- This report is a potential warning that large capital investments in AI may take longer to recoup than expected.
movement: Microsoft stock fell as much as 3% on Wednesday. The technology industry leader has had a rocky few months, but is still at 14% IP year-to-date.
why: Microsoft’s decline on Wednesday was driven by a recent report suggesting the company’s large AI investments may not translate into revenue growth as quickly as previously thought.
The Information reported Wednesday morning that Microsoft has lowered some AI revenue growth targets, noting that customers don’t seem to be embracing the company’s latest tools. It added that this was after some sales staff failed to meet their targets.
what it means: Microsoft is one of a select few AI “hyperscalers” that are spending huge sums of money to build the technology. Any change in customer attitudes toward AI or the timeline for how long it will take for such huge spending to yield returns is likely to spur a major recalibration of tech deals among investors.
The Information’s report comes amid growing concerns that an AI bubble is slowly starting to seep, with many of the biggest technology leaders behind the boom having the most to lose if investor appetite for AI wanes.
Top AI stocks have come under pressure over the past month as valuations have ballooned and uncertainty has grown over when investors and the broader economy can expect to see benefits from AI tools.
Microsoft denied The Information’s report, and a spokesperson told CNBC that the company has not lowered sales quotas for its AI products.
