Microsoft shares jumped 15% on Thursday while Meta tanked 9% as investors handed down two very different verdicts on the tech giants' earnings. The split says plenty about who gets rewarded when the bosses pour billions into AI: one giant gets applause, the other gets punished, and the people at the bottom of the corporate machine are left to absorb the cost of the gamble.
Who Gets the Reward
Microsoft posted fiscal fourth-quarter revenue that beat analyst estimates and reported 43% growth at its key Azure cloud business, which was also ahead of market expectations. The company said it now has over 30 million paid seats for Microsoft 365 Copilot, its AI work assistant, up from more than 20 million as of April. That’s the headline the market wanted. More subscriptions. More dependence. More money flowing upward through the apparatus.
Tracy Woo, principal analyst at Forrester, said in a note on Wednesday that "Microsoft's strong revenue performance, combined with accelerating Copilot adoption, signals that its $190 billion data-center buildout is beginning to deliver returns." Microsoft is on track for its best day since March 13, 2020, when it gained 18.6%. Its stock rose even as the company reiterated its 2026 capital expenditure forecast and signaled a potential spending expansion in its 2027 fiscal year at a time when the market is jittery over the cost of AI.
Who Pays for the Buildout
That $190 billion data-center buildout doesn’t come from nowhere. It comes from the same corporate logic that treats infrastructure as a weapon and workers as a revenue stream. Microsoft’s investors cheered because the numbers looked good enough to keep the machine humming. The company’s own language framed the spending as a future return, while the market treated the whole thing like a test of whether the AI boom can keep extracting value fast enough.
Meta showed the other side of that bargain. The company missed investor expectations on earnings and its revenue guidance for the current quarter. Meta said it expects revenue this quarter of between $61 billion and $64 billion, or $62.5 billion at the middle of the range. Analysts were expecting guidance of $63.15 billion, according to LSEG. The gap was enough to send the stock deeper into the red.
Meta's free cash flow plunged 91% year-on-year to $784 million as it continues to spend on AI investments. That’s the bill. The company keeps feeding money into the machine, and the market wants proof that the sacrifice will pay off soon enough.
What They Call Strategy
Meta's stock is on a record losing streak, on pace to hit 11 days, and is down over 20% in that time. Meta CEO Mark Zuckerberg said the company is "getting a lot of offers for compute at a significant premium" over what the company paid for it. He said that would be a change of direction for Meta if it begins leasing out its excess computing capacity to third parties, though he gave very few details on what that business could look like.
Zuckerberg also acknowledged that the company will need to keep compute resources for itself to develop new products. That’s the balancing act: rent out the surplus if it can, hoard the rest for the next round of product development, and keep the whole structure locked inside corporate control.
Ben Barringer, head of technology research at Quilter Cheviot, said in a note on Thursday, "Right now, the narrative from Mark Zuckerberg is a little light on detail and relying on what could be done in the future." He added, "Meta still has a crucial role to play in the AI world, but it is still finding its way somewhat and that is why we see both costs and revenues looking a little volatile."
That volatility is what the market calls uncertainty. For everyone else, it’s the cost of watching a handful of tech giants decide how much compute, capital, and labor they’ll burn through next. CNBC's Jonathan Vanian contributed to this report.