Meta And Microsoft Stocks Soar On Robust Earnings Reports

Earnings for two of the U.S.’ handful of trillion-dollar companies came out Wednesday afternoon as Meta and Microsoft will update investors, kicking off a crucial week for on-edge big technology stocks as tariffs complicated investor appetite for artificial intelligence-driven growth.

Meta CEO Mark Zuckerberg, left, and Microsoft CEO Satya Nadella will both address investors … More Wednesday.

POOL/AFP via Getty Images

Key Facts

Microsoft generated $70.1 billion in revenue and $3.46 EPS ($25.8 billion net income), compared to consensus forecasts calling for $68.4 billion in revenue and $3.22 earnings per share ($24.1 billion net income) for Microsoft, according to FactSet data, scoring a 13% year-over-year increase in sales and 18% jump in profit.

Those are the best-ever quarterly revenue and profit totals in Microsoft’s history.

Shares of Microsoft shot up 6% following the earnings release, trading at about $420 after hours.

Fellow big tech firm Meta, the parent of Facebook, also exceeded Wall Street expectations, as its $42.3 billion in revenue and $6.43 EPS smashed forecasts of $41.4 billion in revenue and $5.23 EPS.

Meta said it expects second-quarter revenue to come in between $42.5 billion and $45.5 billion, well above consensus projections of $41.3 billion.

Meta stock gained about 5% to more than $570.

Key Background

Microsoft is the U.S.’ second most valuable company with a $2.9 trillion market capitalization, and Meta is the sixth-largest firm with a $1.4 trillion market cap. Meta and Microsoft are two of the so-called “magnificent seven” big tech companies, joining Google parent Alphabet, Amazon, Apple, Nvidia and Tesla. The septet comprises a third of the S&P 500’s total market capitalization thanks to their outsized influence in the artificial intelligence bonanza. Microsoft makes its AI hay via its Azure enterprise cloud computing unit and its stake in ChatGPT parent OpenAI, while Meta just launched a competitor app to the generative AI dominator ChatGPT, Meta AI. Meta and Microsoft shares have both slumped this year amid the broader stock market pullback as investors’ risk profile weakened. Meta and Microsoft stocks declined 5% year-to-date apiece through Wednesday, excluding dividends, though that’s stronger than the 15% or more losses from Amazon, Apple and Nvidia, all of which have far heavier exposure to China than Meta and Microsoft.

Tangent

Meta CEO Mark Zuckerberg and former Microsoft CEO Steve Ballmer were among the 10 billionaires whose net worth fell the most during President Donald Trump’s first 100 days, losing a combined $30 billion, according to Forbes’ calculations.

What To Watch For

Thursday will be another magnificent seven earnings doubleheader, as retail titan Amazon and iPhone maker Apple will share quarterly results.

Crucial Quote

“This is a key few days ahead for the markets and tech world,” remarked Wedbush analyst Dan Ives. The trade war is a “key X variable for tech stocks,” noted Ives, adding this week’s reports should provide a glimpse into how demand has held up among businesses and consumers amid the economic uncertainty.

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