Microsoft (MSFT) is reportedly lowering its sales targets for artificial intelligence (AI) products due to weak demand.
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Media reports state that Microsoft’s growth targets for certain AI products, including software, are being lowered after sales staff across the company missed their goals in the fiscal year ended on June 30 of this year.
It is rare for Microsoft to lower sales quotas for specific products. The adjustment to sales quotas related to AI software and other products comes as customers around the world resist the new products and see limited use for them, according to reports.
Microsoft’s AI Troubles
News of weak demand for Microsoft’s AI products plays into analyst and investor worries that technology companies are spending billions of dollars developing AI applications that may or may not be of use to businesses and individuals.
Skeptics of the AI buildout say that there has yet to be a killer app developed for the technology, raising questions about the money being spent on artificial intelligence infrastructure. MSFT stock was down about 2% on Dec. 3 after reports surfaced concerning cuts to the AI sales quota.
Is MSFT Stock a Buy?
Microsoft’s stock has a consensus Strong Buy rating among 35 Wall Street analysts. That rating is based on 33 Buy and two Hold recommendations issued in the last three months. The average price target on MSFT stock of $629.98 implies 30.92% upside from current levels.
Read more analyst ratings on MSFT stock