This article first appeared on GuruFocus.
Microsoft (NASDAQ:MSFT) stock slipped more than 2% to $479 on Wednesday, following a report that the company has reduced AI software sales quotas due to weaker-than-expected demand.
The Information reported that some corporate clients are hesitant to adopt newer AI products. Industry experts say companies remain in the early stages of integrating AI into their IT systems, a process likely to take time.
Gil Luria, head of technology research at D.A. Davison, said firms are adapting infrastructure to accommodate AI solutions, but adoption is gradual.
The stock is up more than 12% year-to-date but has fallen over 5% this quarter, trading below its 21-day and 50-day moving averages. Microsoft’s Relative Strength rating dropped to 66 from 85 six months ago.
Other AI-focused stocks saw bigger gains. Alphabet (NASDAQ:GOOGL), Meta (META) and Amazon (NASDAQ:AMZN) experienced sector-wide volatility, reflecting investor caution over AI spending and implementation timelines.
