Microsoft records a quarter that significantly exceeds analysts' expectations, confirming that the bet on artificial intelligence is starting to translate into tangible growth in revenue and profitability. The Redmond-based group closed the quarter with revenues of $90 billion, exceeding the Wall Street consensus of around $87,6-$87,7 billion, while Earnings per share ranged from $4,74 to $4,81, well above market estimates, which indicated around $4,24.
The cloud division once again supported the results, with Azure continues to benefit from strong demand of AI services by enterprises. The expansion of the infrastructure and the integration of AI capabilities across the entire Microsoft ecosystem are fueling a growth cycle the market has been anticipating for several quarters.
AI demand continues to outstrip supply: investment is on the rise
During the conference call, management reiterated that Demand for computing capacity continues to outstrip available supply and that the group will continue investing in data centers to increase installed capacity. The message to investors is clear: the phase of heavy investment is not over, but it is starting to produce tangible economic returns.
It is no coincidence that in the hours preceding the publication of the results, Reuters highlighted how the market expected a particularly broad reaction from the stock, with the options market priced in a potential change of around 6,6%, equal to nearly $190 billion in market capitalization, demonstrating the high level of focus on Microsoft's ability to monetize its investments in artificial intelligence.
The financial results seem to have dispelled at least some of these doubts, reinforcing the belief that Microsoft remains the main beneficiary of the new phase of expansion of generative AI. In the after hours, investors rewarded the stock Microsoft shares gained more than 1%, at the end of a day characterised by negative signs for the tech sector.
Meta grows beyond expectations with record revenues, but the market is looking at costs.
Meta also presented a quarter characterized by robust business growth, although investors' reaction was more cautious. The group led by Mark Zuckerberg recorded record revenues of $60,8 billion, up 28% compared to the same period of the previous year and exceeding market expectations.
Net profit stood at 15,8 billion dollars, while earnings per share were equal to dollars 6,18, below consensus expectations. The downside was not so much the dynamics of the advertising business, which continues to show sustained growth, but rather the group's decision to further accelerate investments in artificial intelligence.
Meta has in fact revised upwards the guidance for capital expenditure, bringing the lower limit of the range to 130 billion dollars, compared to the previous ones 125 billion, confirming instead the maximum ceiling of 145 billionThe resources will be primarily allocated to expanding the data center network and the computing power needed to train new AI models and support the applications integrated into the group's platforms.
Meta stock drops more than 5% in after-hours trading
Zuckerberg reiterated that the company intends to continue to invest "aggressively" in artificial intelligence infrastructure, arguing that the technological leadership built today will represent the key competitive advantage in the coming years. This strategy, while considered industrially credible by the market, continues to raise questions about the company's ability to maintain high profitability in the short term.
The indications provided by the management have in fact prevailed over the excellent operating data, pushing the stock down in trading after-hours: shortly after the results were released, it lost more than 5%.
The challenge shifts to AI monetization
The results of the two companies confirm that the central theme of the quarterly season is no longer the amount of investments in artificial intelligence, but their ability to generate economic returns.
Microsoft appears to be in a more advanced stage of the cycle, with Azure and AI services starting to translate demand into revenue and profit growth. Meta, on the other hand, continues to prioritize building the infrastructure needed to support its AI ecosystem, accepting greater pressure on margins in the short term.
For investors, the comparison between the two groups therefore offers a snapshot of the current evolution of the sector: on the one hand, those who are already monetizing their investments, on the other, those who continue to focus on long-term growth, convinced that the race for artificial intelligence can be won. especially with the ability to invest earlier and more than competitors.
