Microsoft, Meta post contrasting quarterly results as AI spending remains in focus
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Microsoft and Meta Platforms reported their latest quarterly results on Wednesday, with both companies continuing to invest heavily in artificial intelligence, although their financial performance diverged.
Microsoft reported revenue of $90 billion for its fiscal fourth quarter ended June 30, up 18% from a year earlier. Net income rose 31% to $35.8 billion. The software giant’s cloud business remained its biggest growth driver, with Microsoft Cloud revenue increasing 27% to $59.3 billion, while Azure and other cloud services revenue grew 43%. Microsoft 365 Copilot also crossed 30 million paid users during the quarter.
The company spent $41 billion in capital expenditure during the quarter as it continued expanding AI infrastructure. However, it maintained its full-year capital expenditure outlook of $175 billion. Shares rose in after-hours trading following the results.
Microsoft Chairman and CEO Satya Nadella said, “Cloud and AI is the driving force of business transformation across every industry and sector.”
Meta 's free cash flow dwindles
Meta, meanwhile, reported a 28% increase in second-quarter revenue to $60.8 billion. However, net income fell 14% to $15.8 billion as expenses surged due to higher AI-related investments and legal charges. The company’s total expenses jumped 55% year-on-year to $42 billion.
Meta also raised its projected 2026 capital expenditure range to $130 billion-$145 billion as it accelerates investments in AI infrastructure and data centres. The company said its family of apps continued to grow, with daily active people across Facebook, Instagram, WhatsApp and Messenger reaching 3.6 billion.
Meta CEO Mark Zuckerberg said the company is seeing “strong momentum” across its AI efforts, adding that artificial intelligence is improving the company’s products while creating new opportunities for businesses and developers.
Contrasting stock reactions
Investors reacted differently to the two earnings reports. Microsoft shares jumped about 8% in extended trading after the company reported stronger-than-expected growth in Azure and cloud services, easing concerns over the returns from its AI investments.
Meta shares, on the other hand, fell around 9% in after-hours trading as investors focused on the company’s sharply higher AI spending, increased capital expenditure guidance and lower quarterly profit despite robust revenue growth.