Microsoft and Meta delivered divergent earnings results that sent their stock prices in opposite directions on Wednesday. Microsoft shares climbed 9% in extended trading after the company posted fourth-quarter revenue that exceeded analyst estimates. The software giant reported 43% growth at Azure, its cloud computing division, which also surpassed market expectations. Additionally, Microsoft disclosed that it has accumulated over 30 million paid seats for Microsoft 365 Copilot, an AI work assistant tool, up from more than 20 million as of April, demonstrating expanding adoption of its artificial intelligence offerings.
Analysts characterized Microsoft’s results as validation of its substantial capital investment strategy. Tracy Woo, principal analyst at Forrester, stated that the company’s revenue performance combined with accelerating Copilot adoption suggested its $190 billion data-center buildout was starting to generate returns. Microsoft maintained its 2026 capital expenditure guidance while signaling a possible spending increase for its 2027 fiscal year, a move that impressed investors despite broader market concerns about AI infrastructure costs. The stock finished extended trading 8% higher and has declined around 24% this year.
Meta, by contrast, disappointed the investment community with weaker-than-expected results. The social media company missed earnings expectations and reduced its revenue guidance for the quarter to between $61 billion and $64 billion, with a midpoint of $62.5 billion, falling short of analyst expectations of $63.15 billion. Free cash flow declined sharply, dropping 91% year-over-year to $784 million, reflecting the company’s substantial spending on AI development and infrastructure. Meta shares fell in extended trading and are down around 16% this year.
Meta Chief Executive Mark Zuckerberg indicated the company was exploring potential revenue opportunities from its computing capacity, noting it had received offers to lease excess compute resources at premium rates. However, he provided limited specifics about such a business model and emphasized that Meta must retain sufficient computing resources for its own product development. Ben Barringer, head of technology research at Quilter Cheviot, noted that Zuckerberg’s comments lacked concrete details and that Meta remains uncertain about its strategic direction amid volatile costs and revenues in the artificial intelligence sector.
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