Ed Ludlow

Amy Hood tried to get that nuance across in the earnings calls, saying, look, we could have had markedly bigger percentage growth for Azure if we'd served external clients, but we're serving ourselves with the compute.

Why do we see the market overreacting like this, even with that nuance?

Yeah, it's a trade-off between short-term and long-term.

Short-term, you see that in the Azure revenue number every quarter.

Longer-term, though, something like Copilot, that's a gross margin accretion cycle

and a long-term monetization story that happens over multiple years.

Microsoft AI, that's something that you're going to get maybe a couple of blog posts this year, a couple of really exciting data points, but it's hard to predict when exactly you'll get those data points.

So the way we see this is there's a little bit of a short-term negative reaction here because it's hard to see into the future.

Ultimately, we do still believe the data points will accrue positive on those two other strategic initiatives.

Let's go back to basics a bit, Gabriella.

And Caro, we talked about this before the show.

This is a drop of 12%.

So this is the biggest drop in the stock since March of 2020.

$429 billion of market value wiped off.

That suggests serious concern, Gabriella.

What do you think is the counter argument to that concern in the market?

Yeah, I do think it's going to be a more balanced evolution on what enterprise AI adoption looks like this year.

We know for two years now, it's been a real struggle to see adoption take off on the enterprise AI side.

There's a lot of heavy lifting that has to happen on the data architectures, the data infrastructure, marrying some of these really cool LLMs with the richness of an enterprise context, and that's taken time.

So as we go through 2026, one of the data points we'll be looking for is