AI Powers Mega Cap Tech Earnings

Happy Thursday – big tech investors reaped the rewards of AI today.

Meta and Microsoft reported earnings yesterday after the close, exceeding analyst estimates. AI is at the forefront of both of these reports – boosting their bottom lines in real time. 

Let’s take a closer look…

AI Drives Meta’s Ad Revenue

Meta’s AI-powered ad targeting drove real, measurable growth. Its AI tools for advertisers surged in adoption, jumping from 1M to 4M users in 6 months. The company will double down on AI infrastructure, raising its 2025 CapEx guidance to $64B – $72B, up from $60B – $65B.

Earlier this week, Meta also launched a standalone AI app, Meta AI, powered by Llama 4, that swiftly integrates with the Ray-Ban smart glasses. 

Meta’s AI endeavors are not a speculative bet like its move into the metaverse in 2021. AI’s impact is already reflected in the company’s bottom line. By 2035, Meta expects up to $1.4T in revenue from generative AI.

Here’s a great discussion with Meta founder, Mark Zuckerberg Dwarkesh Patel talking Meta’s next steps. Mark makes it clear – Meta’s future rests on AI.

$META gained +4.23%. Here’s the daily chart. 

Microsoft Touts Cloud + AI Strength

Microsoft’s bet on AI is printing cash. The Azure cloud service grew +33% YoY — with more than half of its growth coming from AI-enabled services. 

Its AI Copilot’s daily active users more than doubled last quarter due to the integration across Teams, Office and GitHub. 

Microsoft will also double down on its AI efforts as it projects to spend ~$80B in CapEx in 2025. The company’s CEO, Satya Nadella, called AI and cloud “the essential inputs for every business to expand output, reduce costs and accelerate growth.”

$MSFT marched +7.63%, closing at its highest price since January 29th. The stock is now within 8.5% of its July 2024 all-time high. 

Here’s the weekly chart. 

In today’s session alone, Meta and Microsoft jointly added $281B in total market cap. AI is no longer a promise for future growth – it’s here today.

PSA — Tomorrow I will go live with JC Parets at 3PM ET to review the top performing stocks from the last 12 months. Here’s the link – you don’t want to miss this!

If you enjoy this post, please share it with a friend.

Godspeed – Rosebee

_{Disclosure: The author of this newsletter holds $ACHR/W.}