Overview
- Microsoft outperformed expectations in late July with $90 billion in quarterly revenue, about 43% Azure growth, more than 30 million paying Copilot users, and a $3.2 billion gain from its Anthropic stake that helped lift the stock.
- Meta’s second-quarter report showed revenue of $60.8 billion but a 14% drop in net income to $15.8 billion driven by a 67% jump in R&D to $21.7 billion and $2.4 billion in legal costs, and the stock fell roughly 7% after hours.
- Free cash flow at Meta collapsed about 91% year over year to $784 million while the company announced roughly 8,000 job cuts and raised its capital expenditure plan to $130–$145 billion for the year.
- Microsoft signaled a more measured approach to AI buildout with CFO Amy Hood pointing to roughly $175 billion in full‑year investments instead of a previously suggested $190 billion, giving investors confidence that spending can be tempered as revenues scale.
- Markets and analysts warned that the sector’s huge data‑center and chip spending could create overcapacity and valuation risk, with outside financing deals and suppliers such as Nvidia shaping who benefits if the AI infrastructure race continues.