Microsoft Corp. (MSFT) shares just soared, hitting a new all-time high and topping the $4 trillion market cap mark, after the company posted a beat-and-raise quarter. Meanwhile, Meta Platforms Inc. (META) also hit new all-time highs after it posted a double-beat and raised its forecast, notes Tom Bruni, editor-in-chief of The Daily Rip by Stocktwits.
MSFT’s earnings per share of $3.65 and revenues of $76.4 billion topped the $3.37 and $73.8 billion anticipated by analysts. Its implied operating margin of 46.6% topped consensus estimates by 90 basis points despite $30 billion in capital expenditures.
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It continues to face data center infrastructure shortages, and it’s throwing money at the problem until the supply-demand balance improves. Its Intelligent Cloud unit revenue rose 26% year-over-year, and management revealed the size of its Azure business in dollars for the first time ever. It’s over $75 billion (and rose 34% YOY).
At META, earnings per share of $7.14 on $47.5 billion in revenue topped the $5.92 and $44.8 billion expected. Its third-quarter sales forecast of $47.5 billion to $50.5 billion also topped consensus estimates of $46.1 billion.
Like Microsoft, Meta is investing heavily in expanding its Artificial Intelligence (AI) capacity. It said compensation related to hiring will be the “second-largest driver of growth” and contribute to a 2026 YOY expense growth rate that’s higher than 2025’s.
As long as these companies continue to post strong growth – and print cash from their core business – investors are likely to be okay with these capital expenditures. For context, check out the chart above showing their quarterly CAPEX impact on cash flow. That’s a lot of zeros, but Wall Street is loving it!
