Key facts
- Microsoft reported record quarterly profit of $35.8bn on revenue of $90bn, an 18% year-over-year increase.
- Microsoft's Azure cloud services revenue grew 43%, and its AI assistant Copilot has over 30 million paid users.
- Meta's second-quarter profit fell 14% to $15.85bn, while revenue grew 28% to $60.8bn.
- Meta's expenses increased 55% due to legal and severance costs, impacting its operating margin.
- Microsoft maintained its capital expenditure forecast for 2026, while Meta increased its forecast to $130bn-$145bn.
Microsoft reported record quarterly profit and forecast accelerating growth in its Azure cloud business, driven by significant investments in artificial intelligence. The company's shares surged in pre-market trading following the announcement.
Microsoft's revenue for the April-June quarter increased 18% year-on-year to $90bn, with net profit climbing 31% to a record $35.8bn. This performance was partly boosted by an unrealised gain on its investment in AI company Anthropic. Azure and other cloud services revenue grew 43%, with CEO Satya Nadella noting that Azure revenue surpassed $100bn for the first time and Microsoft 365 Copilot reached over 30 million paid seats.
Microsoft's Chief Financial Officer Amy Hood indicated that capital expenditure plans for 2026 remain unchanged, a move that suggests confidence in the long-term returns of its AI investments, differentiating it from competitors who are steadily increasing their spending forecasts.
In contrast, Meta Platforms announced a 14% decline in second-quarter profit to $15.85bn, despite a 28% revenue increase to $60.8bn. The company's expenses rose significantly by 55% due to charges related to legal proceedings and severance costs from workforce reductions. Meta's operating margin narrowed to 31% from 43% a year earlier. CEO Mark Zuckerberg highlighted AI's role in accelerating Meta's core business and powering new products, expressing optimism about future potential.