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 after-hours trading following the announcement.
Microsoft's revenue for the April-June quarter increased 18% year-on-year to $90 billion, with profit rising 31% to $35.8 billion. Azure, Microsoft's cloud computing service, saw revenue jump 43%, and its AI assistant Copilot now has over 30 million paid users. The company maintained its capital expenditure forecast, signaling confidence in its AI strategy.
In contrast, Meta Platforms reported a 14% decline in profit to $15.85 billion, despite a 28% revenue increase to $60.8 billion. The social media giant's expenses surged 55% to $42.03 billion, largely due to increased AI investments and costs related to legal proceedings and severance packages. Meta's free cash flow plummeted from $8.55 billion to $784 million.
Meta CEO Mark Zuckerberg defended the company's substantial AI spending, framing it as a necessary investment for future consumer market opportunities and highlighting the potential of AI agents across its platforms like Facebook, Instagram, and WhatsApp. However, investors reacted negatively, with Meta's stock falling nearly 10% in after-hours trading, while Microsoft's shares climbed almost 8%.