CNBC's Steve Kovach reports Microsoft's statement saying the company has not lowered its sales quotas or targets for its salespeople.

Microsoft has responded to recent reports by stating it has not lowered sales quotas or targets for its salespeople in relation to AI products. The company highlighted that a media outlet corrected its headline to clarify that only AI software growth targets were adjusted, not sales quotas. 

Despite initial market sensitivity that led to a brief drop in Microsoft shares, the company's clarification helped ease investor concerns. Microsoft continues to see strong growth in its cloud business, driven by AI spending, even as some enterprise customers report mixed results with certain AI products.

Microsoft: Have not lowered sales quotas or targets for salespeople

Hey there, Mike. Yeah, literally, as I was on air with you guys, Microsoft, a few minutes ago, Microsoft emailed me. They are kind of knocking back on this information report saying they cut sales quotas for some AI products. Let me just read you what they told me. They say now the company has not lowered quotas targets for its salespeople. And they also mentioned or pointed out that the information just changed its headline on the story that said they lowered quotas. Now the headline reads Microsoft lowers AI software growth targets. That is way different than sales quotas. So a little bit of nuance here going on. But the information did correct their headline or change their headline rather based on this new information. Microsoft is saying Microsoft now saying they have not reduced the sales quotas. I'm also expecting Microsoft to come out with some more information of this. But you can see now shares are reacting here a little bit. They were down as much as 2.5 percent last I looked. Now down more like 1.5 percent, guys. I mean, Steve, obviously, it's a substantive difference but also shows you how sensitive the market is to just any slight change of the anticipated pace of growth in these areas and who's relatively in and out and whether we have to downscale our expectations for how quick this stuff pays off. And keep in mind, this was just one little product within the whole suite and portfolio of AI products that sent the shares down to 1.5 percent. It's not even their main product. And, again, like I said when I was on a few minutes ago, the cloud business is doing great and growing like crazy. It's over $100 billion a year business now in large part due to all this AI spending happening in the cloud. So, yes, the market is incredibly sensitive to these kind of headlines. But just this clarification from Microsoft really does seem to be easing some of those fears, Mike. Does, though, the thesis that there is frustration on some of the leading edge products within the enterprise, Steve, and that remains intact? Yeah, that's absolutely. There are some questions about that. And, again, I'll go back to what I told you last time, Carl, which was I talk to CTOs all the time. And they keep telling me, yeah, Copilot's good for some things or maybe not. But they also say the outputs are not that great. Basically, the promise doesn't necessarily live up to what these kind of products can deliver. And they're seeing much more success building it themselves and these kind of bespoke AI chatbots or agents or what have you. But, by the way, when they do that, that is still to Microsoft's benefit because they can choose Azure to run all this stuff on Microsoft's cloud. So even if they're not going out there necessarily and buying these products, it doesn't necessarily matter because Microsoft still sees an upside on the cloud side. It's interesting to see the underperformance of Microsoft. I mean, it's still up almost 15 percent this year, but underperforming some of the other competitors, certainly in Alphabet. Thank you, Steve. Steve, go back. Clarifying that Microsoft report and, again, as he said, easing some of the concerns about AI order.

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