Microsoft Jumps 14%, Meta Tanks 9% as AI Trade Splits
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- Microsoft shares jumped 14% on Thursday after fiscal Q4 revenue beat estimates, with Azure cloud growing 43% and paid Microsoft 365 Copilot seats rising to over 30 million from 20 million in April.
- Meta tanked 9%, putting it on pace for a record 11-day losing streak during which it has lost over 20%, after missing earnings and guiding Q3 revenue to $61–64 billion versus the $63.15 billion analysts expected.
- Meta's free cash flow plunged 91% year-over-year to $784 million as the company continues spending heavily on AI infrastructure.
- Mark Zuckerberg said Meta is "getting a lot of offers for compute at a significant premium" over what it paid, hinting the company could begin leasing excess AI computing capacity to third parties — a potential new business direction with few details provided.
- Forrester's Tracy Woo said Microsoft's revenue beat and accelerating Copilot adoption signal its $190 billion data-center buildout is "beginning to deliver returns."
- Quilter Cheviot's Ben Barringer said Zuckerberg's narrative is "a little light on detail" and Meta is "still finding its way somewhat" in AI, explaining the volatility in both its costs and revenues.
Why it matters: Microsoft's $190 billion data-center bet now has Copilot at 30 million paid seats and Azure growing 43% — concrete validation the AI capex cycle is generating revenue. Meta, by contrast, saw free cash flow crater 91% to $784 million and cut its guidance, wiping out over 20% of its stock value in 11 sessions and forcing investors to question whether its AI spending has a clear payoff timeline.
