Some of America's largest technology companies are about to report their latest quarterly operating results.
The stock market is off to a volatile start to 2026. The Nasdaq-100 technology index was down by as much as 12% from its peak in March, only to recover all of its losses and hit a new record high in April. Investors have been trying to price in the potential economic impacts of the wild swings in oil prices, caused by the geopolitical conflict between the U.S. and Iran.
But Wall Street's attention will soon be on the operating performance of some of America's largest technology companies. On April 29, Microsoft (NASDAQ: MSFT) will release its financial results for its fiscal 2026 third quarter (ended March 31), which will include valuable updates on artificial intelligence (AI) products and services such as the Copilot virtual assistant, and the Azure cloud platform.
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Microsoft stock is currently down 22% from its record high, but here's why the April 29 report could be a very bullish catalyst.
AI chatbots are a dime a dozen right now, so it's unlikely all of them will survive over the long term. However, Copilot has a distinct advantage, because it's being deployed into Microsoft's existing software products that collectively serve billions of users around the world already.
Copilot is available for free in the Windows operating system, the Bing search engine, and the Edge internet browser, but it can also be added to enterprise versions of the 365 productivity suite (which includes Word, Excel, Outlook, and more) for an additional subscription fee. This is a huge financial opportunity for Microsoft, because companies around the world already pay for over 400 million 365 licenses for their employees, and every one of them is a candidate for the Copilot upgrade.
But as of Dec. 31, businesses had only bought 15 million Copilot for 365 licenses, representing a modest penetration rate of just 3.7%. On the plus side, that figure was up 160% year over year, and some of the usage metrics suggest once businesses start using Copilot, they tend to introduce it to more of their employees over time.
Microsoft is likely to provide an update on Copilot adoption on April 29, and investors will probably want to see more triple-digit percentage growth given the relatively low base license number.
Over the past four quarters, Microsoft spent $118 billion to build data centers that house thousands of specialized chips from Nvidia and other suppliers. It rents this infrastructure to businesses through its Azure cloud platform, and they use it to develop AI models and software for their own purposes.