Microsoft spends billions on AI: Here’s what you’re missing

A prominent Wall Street analyst claims investors are overlooking a key shift in Microsoft’s strategy, even as billions are lost from the company’s market value.

The founder of EMJ Capital Eric Jackson an analyst who has studied 84 Microsoft earnings calls between former CEO Steve Ballmer and current CEO Satya Nadella, believes that Microsoft’s communication regarding AI is surpassing its financial performance.

Jackson describes the company’s earlier era as a “Cash Machine” phase, closely linking statements to results. Today, he calls it an “AI Tailwind” phase, with Satya Nadella emphasising AI across products even before revenue fully reflects the growth.

“Satya's language is ahead of his numbers for the first time in a decade,” Jackson wrote on X.

The disparity is clear when comparing Microsoft 365 Copilot, the company's AI flagship, to GitHub Copilot, which has 4.7 million subscribers paying annually and registering a yearly growth of 75%.

However, Microsoft 365 Copilot took time to find its market niche, according to information released by the company's investor relations division.

CFO Amy Hood revealed that there have been some adjustments within the company where Microsoft is allocating more resources from its cloud business to develop AI capabilities.

The increased capital expenditure is clear since the firm spent $37.5 billion in one quarter alone. Missed KPIs indicate that the decision was deliberate.

Microsoft stock performance dropped by 22.78% in 2026, with almost a quarter of the price falling in six months. There are high expectations from the upcoming earnings calls on April 29 regarding Copilot revenue, Azure AI revenues, and signals that their efforts in AI are starting to bear fruit.

Jackson concludes that the company’s AI approach may be reshaping its business, but April 29 is the test for whether strategy aligns with results, as Wall Street watches closely for concrete evidence of AI-driven growth.