In April–May 2026, Microsoft confirmed that its AI agenda is not merely a “bubble,” but a real driver of financial performance. According to results for the third fiscal quarter of 2026, revenue reached around $82.9 billion (+18% YoY), while Microsoft Cloud revenue rose 29% to approximately $54.5 billion.
At the core of this growth was Azure, which accelerated to 40% annual growth, surpassing the company’s own expectations for the first time in more than two years.
Particular emphasis was placed on the AI business: Microsoft estimated its annual AI revenue run rate at $37 billion (+123% YoY), combining Azure AI services, Microsoft 365 Copilot subscriptions, GitHub Copilot, and related products. At the same time, the company increased its 2026 capex plan to around $190 billion, with a significant portion allocated to memory, data centers, and AI infrastructure; quarterly capex already exceeded $30 billion. This is creating pressure on margins, though the market views Azure’s rapid growth as proof that Microsoft’s AI bet is paying off.
Copilot and the corporate market
In April–May 2026, Microsoft reported that Microsoft 365 Copilot surpassed 20 million paid seats, nearly doubling from January 2026 and representing around 4–5% penetration of its commercial portfolio. The company also simplified its AI pricing stack through the new Microsoft 365 E7 package ($99 per user/month), which includes Copilot and enhanced security features, making large-scale enterprise adoption easier.
However, the market notes that most companies are still following a “selective model”: only 1–7% of employees receive paid licenses, while the rest use the free Copilot Chat to first evaluate ROI and security. This suggests that the large-scale monetization “explosion” is still ahead, but rising deployments and growth in remaining performance obligations (RPO) to $627 billion indicate that demand for Microsoft’s enterprise AI services remains stable and continues to accelerate.
Regulatory and antitrust risks in Europe
While growth in AI and cloud services continues to attract attention, Microsoft is also facing increasing regulatory scrutiny, particularly in the UK and the EU. In March 2026, the UK Competition and Markets Authority (CMA) announced an investigation into Microsoft’s status as a “strategic digital player” within the enterprise software and AI ecosystem, potentially leading to a reassessment of licensing models and obligations.
The focus is on Microsoft’s dominance in office software, cloud services, and AI interfaces (including Copilot), which could affect future pricing and integration models with competitors. While the investigation has not yet resulted in concrete decisions, analysts note that regulatory risk is gradually becoming a discounting factor for Microsoft’s long-term valuation, especially in European jurisdictions.
Market and stock outlook: correction, but the long-term trend remains bullish
Another attempt by bulls to break resistance around the $432 level has failed, signaling persistent selling pressure and risks of a decline toward the $404–400 area, where buying interest may emerge again. A confident breakout above resistance would open the way toward $500.
As previously noted in Microsoft remains near strong resistance as AI business growth supports stock, the long-term bullish trend remains intact.
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