Microsoft jumps 15%, Meta tanks 9% as AI trade splits after earnings
Microsoft shares surged 15% on strong Azure and Copilot growth, while Meta shares dropped 9% after missing revenue guidance as free cash flow plunged. The diverging results show investor sentiment on AI spending splitting sharply between the two tech giants.
Microsoft shares jumped as much as 15% after quarterly results, as strong growth in its Azure cloud unit and rising demand for the Copilot AI assistant pushed revenue above analyst estimates. Investors welcomed signs that the company's heavy AI spending is finally translating into tangible revenue.
Meta, reporting the same day, offered a starkly different picture. The company's revenue fell short of market expectations, and a sharp decline in free cash flow unsettled investors, sending its stock down 9%. The drop extends a losing streak for Meta shares in recent sessions.
The sharp divergence between the two companies suggests Wall Street is growing more selective about which firms are converting AI spending into profit. Analysts will watch closely in coming quarters to see which companies can turn their AI investments into durable revenue growth.
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