Microsoft’s stock surged 8% following a strong quarterly report that outpaced expectations, while Meta faced a sharp 10% drop after disappointing profit results and rising costs.
Microsoft’s solid Financial Performance
In the fiscal fourth quarter ending June 30, 2026, Microsoft posted $90.01 billion in revenue, surpassing the anticipated $87.62 billion. Adjusted earnings per share came in at $4.74, beating the predicted $4.24. The company’s cloud business played a major role, driving an 18% year-over-year rise in total revenue. Operating profit climbed to $40.6 billion, an 18% increase compared to the prior year. Microsoft’s GAAP net income jumped 31% to $35.77 billion, while adjusted net income rose 22% to $35.29 billion.
The impact of Microsoft’s investment in OpenAI was excluded from adjusted figures, which lowered quarterly net income by $480 million. Despite this, the company maintained steady AI-related spending and projected stable expenditure on AI development through 2026.
Meta’s Profit Fall Amid Revenue Beat and Cost Surge
Meta Platforms reported revenue of $60.80 billion, narrowly above the expected $60.17 billion, but its adjusted earnings per share of $6.18 fell short of the $7.22 forecast. The miss led to a 10% decline in its stock price, reflecting investor concerns about swelling expenses and weaker profitability. Meta’s growing costs stood in contrast to Microsoft’s stronger bottom line, highlighting divergent paths despite both companies focusing heavily on AI innovation.
These results illustrate the risks and rewards tech giants face as they invest heavily in artificial intelligence. While Microsoft’s cloud and AI ventures appear to be paying off, Meta’s higher spending without matching profit growth has unsettled its investors. The contrasting fortunes shows the intense competition and financial challenges in commercializing AI.
The content is for informational purposes and does not constitute financial advice.
