Microsoft beat analysts’ expectations for revenue, EPS and—most importantly—revenue related to its cloud services through Azure. The stock is up 1.90% compared with prices at the close of trading on Wall Street. The story is different for Meta: the company founded and led by Mark Zuckerberg fell more than 6% in after-hours trading, mainly because of tepid revenue guidance for the current quarter.
Two of the companies most representative of the stock markets, and absolute protagonists of the artificial intelligence cycle, are moving in opposite directions. Microsoft is celebrating significant revenue during a period of enormous spending on AI infrastructure. The numbers from Meta/Facebook, meanwhile, point in the opposite direction, although the company did not rule out in recent weeks the possibility of launching cloud services to monetize its unused computing power.
This year Azure surpassed $100 billion [in revenue, Ed.] for the first time, and Microsoft 365 Copilot surpassed 30 million paid users, reflecting the confidence consumers are placing in Microsoft for AI transformation.
This year Azure surpassed $100 billion [in revenue, Ed.] for the first time, and Microsoft 365 Copilot surpassed 30 million paid users, reflecting the confidence consumers are placing in Microsoft for AI transformation.
This is the comment from Microsoft CEO Satya Nadella, who is celebrating encouraging results for the cloud sector—results that, our readers will forgive the pun, dispel the clouds that had been gathering over the entire tech sector.
Meta’s Numbers Fail to Convince
What failed to convince on the Meta front was its revenue forecast for the next quarter, between $61 billion and $64 billion, averaging below analysts’ expectations of $63.2 billion. The lackluster revenue forecast is particularly concerning during a period of enormous spending by Mark Zuckerberg’s company as well, in the AI sector.
The markets punished the stock heavily: in trading outside standard hours, the group lost more than 6%, although price movements remain volatile, as after-hours trading—with historically low volumes—is not always able to price in certain news correctly.
The 91% decline in cash flow also weighed on the stock, driven—as in Google’s case—by substantial investments in the AI sector, particularly in infrastructure. The group reported $784 million in free cash flow, compared with $8.55 billion a year earlier.
