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Investing.com -- Microsoft is pushing back firmly against claims of weakening demand for its artificial intelligence products, and Jefferies is siding with the company after speaking directly with management.
The Information reported that several Microsoft divisions had lowered sales growth targets for certain AI tools following missed quotas in the fiscal year ending in June.
But Jefferies analyst Brent Thill said the report “completely missed the point,” citing fresh commentary from Microsoft leadership.
“We spoke with MSFT live this morning,” Thill wrote, adding that executives urged investors to focus on the data and “look at the scoreboard.”
Jefferies highlighted that remaining performance obligation growth “accelerated 14 pts to 51% y/y last quarter,” and that the figure jumps to “148% y/y including the $250B OpenAI deal.”
Thill said Microsoft also pushed back on the notion of soft demand, stressing that “persistent capacity constraints” show that AI demand is greater than supply.
Jefferies’ own industry checks, he added, remain “strongly supportive of robust Copilot adoption,” countering suggestions that the product is seeing slower-than-expected uptake.