The Nasdaq Composite index has been scorching hot this year, returning 35% in 2023 as of the time of this article. While many technology companies resorted to layoffs and tight budgets in an effort to return to profitability, the hype around artificial intelligence (AI) has brought a lot of momentum to the sector.  

(NASDAQ: MSFT) wasted no time taking advantage of the AI trend, notably making a multibillion-dollar investment in ChatGPT parent OpenAI earlier this year. Following the investment, Microsoft integrated generative AI into its search platform, Bing.

More recently, the company announced a subscription service called Copilot, which leverages AI across the company's suite of Office products such as Word, Excel, PowerPoint, and Teams. Microsoft's aggressive innovation in its race against tech counterparts such as Alphabet and Amazon has helped fuel the stock throughout much of 2023. However, the double-edged sword here is that investor expectations going into earnings were sky-high.

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Source Fool.com