Microsoft denies cutting AI sales targets amid reports of missed goals

Microsoft has dismissed reports suggesting it reduced AI sales expectations after Azure staff missed growth quotas, stating targets remain unchanged. The company continues to expand its AI infrastructure as cloud revenues show strong double-digit growth in fiscal 2026.

Microsoft has firmly denied claims that it scaled back sales expectations for its artificial intelligence products following concerns about underperformance within its Azure division. Reports earlier this week suggested that fewer than one-fifth of Azure sales staff met their Foundry-related growth targets for the fiscal year ending June, raising speculation that the company had relaxed its goals. Microsoft clarified that no such changes have been made to employee sales quotas.

Despite the clarification, Microsoft’s stock slipped more than 2% in Wednesday’s early trading. Retail investor sentiment, however, shifted upward, moving from bearish to bullish territory on social platforms, with message activity returning to normal levels.

Strong cloud momentum despite industry skepticism

The debate around Microsoft’s AI targets comes as the broader tech industry weighs the long-term viability of enterprise AI adoption. Still, Microsoft has continued to double down on its AI strategy. Earlier this year, the company announced a record $35 billion capital expenditure aimed at expanding data centers and advanced infrastructure to support its next wave of AI services.

Financial results from the first quarter of fiscal 2026 underscore the company’s momentum. Azure and cloud services revenue grew 40% year-on-year on a reported basis, while Intelligent Cloud revenue rose 28% to $30.9 billion. Total Microsoft Cloud revenue climbed 26% to reach $49.1 billion.

These gains highlight the sustained demand for AI-enabled cloud solutions, even as questions linger about sales execution across divisions. Microsoft shares have risen 14% so far this year, supported by continued investor confidence in the company’s long-term AI strategy.