Wednesday wasn't an ideal day to plow money into artificial intelligence (AI)-linked stocks. A media report stated that a major AI adopter was easing off on selling AI-enhanced products, which affected stocks like chip maker Broadcom (AVGO +1.43%). The company's shares declined marginally, on a day when the benchmark S&P 500 index bumped 0.3% higher.
Reduced expectations?
That report appeared on tech industry news website The Information. According to a digest of the article from Investing.com, the site reported that an unspecified number of Microsoft divisions have reduced their sales growth targets and quotas for AI products.
Image source: Getty Images.
This apparently came on the heels of numerous salespeople in the company missing their sales goals in the tech giant's most recently completed fiscal year.
Microsoft vehemently denied this, stating succinctly in an email statement that "We did not lower AI sales quotas."
NASDAQ: AVGO
Key Data Points
AI angst
The market's reaction to the story, and the subsequent Microsoft denial, suggests some skepticism that the targets and quotas had actually been reduced.
Nevertheless, I personally find it believable that a concentrated AI product sales effort is meeting some resistance. We often lose sight of the fact that this is still a relatively new technology, and many individual and enterprise clients have limited experience with it -- and thus might not be convinced of its utility and value.
While we must consider The Information's article speculative, given the company's denial, we should still bear that resistance in mind. I'm a Broadcom bull, and I think the company will do fine, but let's be cautious with our expectations on this otherwise revolutionary technology.
