Thursday was a study in opposites for two of the biggest names in tech.
The 14% increase marked Microsoft's strongest single trading day since an 18.6% gain on March 13, 2020. For Meta, the 9% drop extended its losing streak to 11 straight days - a company record. In that stretch, Meta's stock has now fallen more than 20%.
Investors are making a clear distinction. They rewarded Microsoft because it delivered hard numbers that proved its AI bets are working. They punished Meta because the company missed expectations and offered mostly promises about the future.
Microsoft's Azure cloud business grew 43% in its fiscal fourth quarter, beating what analysts had expected. That alone was enough to get investors excited. But the real story was the company's AI assistant, Microsoft 365 Copilot.
Growth like that does not go unnoticed.
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The company has been spending heavily to build out data centers. In a research note, Forrester principal analyst Tracy Woo commented: "Microsoft's strong revenue performance, combined with accelerating Copilot adoption, signals that its $190 billion data‑center buildout is beginning to deliver returns." That is what investors wanted to hear - the spending is starting to pay off.
Meta had a much rougher day.
Meta CEO Mark Zuckerberg stated that the company receives "a lot of offers for compute at a significant premium" relative to what it originally spent. Such a move would represent a strategic shift for Meta should it start renting its spare computing power to outside firms. Still, the company offered scant specifics about the potential shape of this new venture. Concurrently, Zuckerberg admitted that Meta must retain its own computing capacity to work on new offerings.
Quilter Cheviot's head of technology research, Ben Barringer, wrote in a research note: "Right now, the narrative from Mark Zuckerberg is a little light on detail and relying on what could be done in the future. Meta still has a crucial role to play in the AI world, but it is still finding its way somewhat and that is why we see both costs and revenues looking a little volatile."
The split between these two stocks tells you something important about the AI trade. Companies that can prove their spending is producing real revenue are getting rewarded. Companies that cannot are getting punished.
For Microsoft, the strong results raise the question of whether it will push spending even higher in fiscal 2027. Microsoft reaffirmed its capital spending outlook for 2026 and hinted at increased investment during its 2027 fiscal year.
For Meta, the situation is more uncertain. Zuckerberg hinted at a possible new business selling access to extra computing power, but he gave few details.
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