After two juggernauts in the tech industry posted quarterly results, reactions diverged. Microsoft (MSFT) posted Azure revenue topping $100 billion, lifting the stock by nearly 9% to $425 in after-hours trading.
Microsoft earned $4.74 a share (non-GAAP), which excluded the impact from its OpenAI investments. The firm recorded a $480 million loss in net income from OpenAI, or $0.07 a share. That is down from $1.575 billion in GAAP net income last year.
Microsoft 365 cloud revenue grew by 16%. Azure and other cloud services revenue, however, soared by 43%.
Meta Platforms (META) posted GAAP EPS of $6.18. Revenue jumped by 27.9% Y/Y to $60.8 billion. Despite ad impression growth across its Family of Apps up by 14% Y/Y, META stock lost 7.4% in after-hours trading.
Markets are punishing the company for taking $2.4 billion in charges related to legal proceedings. It also set a full-year 2026 total expense target of $165 billion to $169 billion.
Capital expenditures are also a concern. It will range from $130 billion to $145 billion.
Shareholders are not convinced that Meta’s heavy spending in AI, headsets, and supercomputers will pay off.
The second age of social media might fade in the coming years. European countries are restricting children from having any social media account. The pool of users will shrink in the coming generation.
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