Key Points
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The S&P 500 index is currently 2% below its all-time high, while the iShares Expanded Tech-Software Sector ETF is 37% below its record close as of April 10, 2026.
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Adobe reported a 13% jump in high-margin subscription revenue and a threefold increase in AI-driven annual recurring revenue for its fiscal first quarter ending February 27, 2026.
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Microsoft’s fiscal second-quarter results, ended December 31, reveal a 15% increase in constant-currency sales, driven largely by its cloud and AI segments, with Azure sales growth nearing 40%.
As of April 10, 2026, the S&P 500 index is 2% below its all-time high, while the iShares Expanded Tech-Software Sector ETF is significantly lower, at 37% below its peak. This discrepancy suggests an opportunity for investors in software stocks, particularly Adobe and Microsoft, which have both seen stock prices fall amid concerns over artificial intelligence (AI).
Despite fears that AI could diminish demand, both companies reported strong operating results. Adobe’s fiscal first quarter showed a 13% increase in subscription revenue and a threefold rise in AI-driven revenue. Similarly, Microsoft’s second-quarter results indicated a 15% rise in sales driven by its cloud services, with Azure experiencing nearly 40% growth.
