Microsoft Delivers Robust Cloud and AI Growth
Microsoft reported an impressive fourth quarter with total sales rising 18% to $76.4 billion, easily surpassing analysts' estimates. The tech giant’s cloud segment, anchored by Azure, posted a remarkable 39% year-over-year jump in sales, with the cloud division generating over $75 billion in revenue for the fiscal year—a figure disclosed for the first time. Microsoft continues to see substantial momentum as it commercializes artificial intelligence services, leveraging partnerships and tools like
ChatGPT to enhance its offerings[1].
- Azure cloud unit sales boosted by 39% compared to the previous year
- Cloud revenue jumped to $75 billion for the year ended in June
- Total sales reached $76.4 billion for the quarter
- Net income hit $3.65 per share, beating expectations of $3.37
- Shares rose 7% in after-hours trading following the results
Meta Exceeds Expectations With Ad and AI-Driven Revenue
Meta, the parent company of Facebook and Instagram, also surpassed Wall Street forecasts with its second-quarter results. Meta posted $47.5 billion in revenue, topping analyst projections and setting a strong outlook for the third quarter with forecasted sales between $47.5 billion and $50.5 billion. The surge is attributed to robust growth in its digital advertising business and accelerated investments in artificial intelligence, including recruitment and infrastructure to maintain its lead in the fast-evolving AI landscape. Meta’s stock saw gains of up to 10% in late trading[1].
- Second-quarter revenue: $47.5 billion, higher than projections
- Third-quarter sales expected between $47.5 billion and $50.5 billion
- Capital expenditure guidance for 2025 raised to $66–$72 billion, reflecting aggressive AI investments
- Share price up nearly 19% year-to-date ahead of the report
AI Investments Remain Center Stage for Both Giants
Both companies highlighted the ongoing arms race in artificial intelligence as a primary driver of performance. Microsoft’s strong cloud growth is closely tied to its leadership in developing and deploying AI services. Meta, meanwhile, has ramped up spending on talent, data centers, and energy to support new AI initiatives, positioning itself as a formidable competitor in the sector.
Key AI tools such as
ChatGPT and Meta's emerging generative AI models are central to their respective growth strategies. As regulatory and trade challenges persist, both firms are committed to sustained investments to secure their foothold in the next generation of digital technology[1].
Market Impact and Outlook
The upbeat earnings from Microsoft and Meta signal continued momentum in the broader technology sector, driven by the increasing adoption and commercialization of artificial intelligence. Investor confidence remains high as both companies outpace expectations, highlighting the critical role of AI in shaping the future of tech industry leaders[1].
