Episode summary
Microsoft Slips on Report of Lower Demand for Some AI Tools | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Norah Mulinda · Guests: Anurag Rana, Mary Ross Gilbert, Lily Meier, Deborah Aitken
Summary
Microsoft’s AI demand was the main tech debate, with the host pressing a Bloomberg Intelligence analyst on a report that some divisions lowered expectations for AI-related sales. The analyst argued there is no meaningful slowdown in Microsoft’s core AI infrastructure business, but that software products like Copilot can face weaker enterprise spending, slower implementation, and uneven demand. He said Microsoft remains ahead of competitors because of its OpenAI tie-in, even as investors question how much AI monetization has already been pulled forward.
The discussion then turned to enterprise software, where the analyst said Salesforce and Workday remain pressured by weak hiring and softer corporate spending, making growth more muted than the market wants. Oracle was flagged as a bigger risk because of the scale of its OpenAI-related expectations and the financing needed to support that buildout.
Retail commentary was more upbeat. Macy’s was described as showing strong operating momentum, but with conservative guidance weighing on the stock. Dollar Tree was presented as benefiting from budget-conscious shoppers and trade-down behavior, even as tariffs hit traffic. For luxury, the analyst said 2025 ended better than expected and sees 2026 improving if price increases stay limited and growth shifts toward volume.
Key takeaways
- The Bloomberg Intelligence analyst said Microsoft’s AI infrastructure demand is still strong, even if some AI software products face slower enterprise adoption.
- The analyst said Salesforce’s growth remains constrained by weak corporate hiring, with revenue growth expected to stay around 9% to 10%.
- Oracle faces the biggest AI-related uncertainty because the market is asking how OpenAI will fund its planned spending, not just whether credit risk is rising.
- Macy’s showed improving traffic and comp sales, but the stock fell on conservative fourth-quarter guidance, not on weak execution.
- Dollar Tree is benefiting from lower-income shoppers and trade-down demand, though tariffs reduced traffic this quarter.
- Luxury-goods recovery in 2026 depends on modest price increases and volume-led growth as tariff pressure eases.
Notable quotes
“there is no slowdown in Microsoft at that point. in fact that Microsoft is capacity constraints right now”
“enterprise spending is weak. when you're looking at Fortune 2000 companies, they're not hiring at that same pace that they used to”
“we think it is going to be very much in line with what they had last time somewhere around 9 10%”
“we think when we think about it, we think there's upside here”
“we started out 2025 with an expectation that we'd move back to growth and that certainly didn't materialize through the first half of the year”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. A lot of tech stories out there, including the one here, Microsoft.
Uh here the question is I guess the information was out earlier that multiple Microsoft divisions lowered how much salespeople are supposed to grow their sales of certain AI products after many missed sales goals in the fiscal year ended June. That's what the information reported earlier today. Microsoft though um has not lowered sales quotas and targets for salespeople.
That's according to CNBC. They reported that on air citing an emailed statement from Microsoft. So I don't know what's going on out there.
Microsoft stocks down a little bit here. Honor Rana, technology analyst at Bloomberg Intelligence joins us here. Honor, just kind of put that information reporting the CNBC kind of rebutting it.
I mean, just give us a sense of kind of AI sales, how this thing is kind of progressing because I can't imagine there's any material slowdown in AI from what I've heard. Yeah, Paul. So, when you look at there are two different elements of it.
One is the AI infrastructure piece of it. Well, there is no slowdown in Microsoft at that point. in fact that Microsoft is capacity constraints right now but to be honest that's not the sales quot somebody is looking at it that just comes in because you're hosting somebody's model or you're trying to get uh you're hosting chat GPT the sales quotas would be for products such as you know Microsoft copilot office copilot github copilot all those products and you know that's not same for everything there are certain products that sell better than the others because of the use case of it github copilot for example because it's a coding software ware platform.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- microsoft demand for ai tools
- cloud ai marketplaces and agents
- retail earnings outlooks
- macy's earnings forecast
- dollar tree earnings outlook
Companies and tickers mentioned
- MSFT
- M
- DLTR
- Microsoft
- Macy's
- Dollar Tree
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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