Microsoft shares jumped 9% in premarket trading after Azure grew 43% and Copilot seats topped 30 million, while Meta fell 9% on a revenue guidance miss and a 91% plunge in free cash flow — the starkest earnings split between two major AI investors yet in 2026.
Contrasting earnings reports from Microsoft and Meta on Wednesday sent the two companies' shares sharply in opposite directions in premarket trading Thursday, underscoring how differently Wall Street is judging AI spending across the technology sector.
Microsoft shares climbed 9% in premarket trading after the company posted fiscal fourth-quarter revenue that beat analyst estimates and reported 43% growth at its Azure cloud business, also ahead of market expectations. Meta shares fell 9% after the social media company missed investor expectations on both earnings and forward revenue guidance.
Microsoft said it now has over 30 million paid seats for Microsoft 365 Copilot, its AI work assistant, up from more than 20 million as of April — a figure analysts cited as evidence that its infrastructure investments are converting into commercial returns.
"Microsoft's strong revenue performance, combined with accelerating Copilot adoption, signals that its $190 billion data-center buildout is beginning to deliver returns," Tracy Woo, principal analyst at Forrester, said in a note Wednesday.
The stock's gains came even as Microsoft reiterated its 2026 capital expenditure forecast and signaled a potential spending expansion for its 2027 fiscal year — a disclosure that might have rattled investors at a moment when markets remain sensitive to AI cost outlays. Microsoft shares remain down roughly 24% year to date.
Meta's session told a different story. The company guided for third-quarter revenue of between $61 billion and $64 billion, or $62.5 billion at the midpoint, falling short of the $63.15 billion analysts had expected, according to LSEG. Free cash flow plunged 91% year on year to $784 million as Meta continued to pour capital into AI infrastructure.
Chief Executive Mark Zuckerberg said Meta is "getting a lot of offers for compute at a significant premium" over what the company originally paid, hinting at a possible shift toward leasing out excess computing capacity to third parties. He acknowledged, however, that the company would need to retain substantial compute resources to develop new products, and few details on the potential business were offered.
"Right now, the narrative from Mark Zuckerberg is a little light on detail and relying on what could be done in the future," said Ben Barringer, head of technology research at Quilter Cheviot, in a note Thursday. "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." Meta shares are down roughly 16% for the year.
The earnings divergence between the two companies arrived alongside fresh signals of AI-driven demand elsewhere in the sector. Samsung Electronics posted a record quarterly operating profit of 89.5 trillion won, beating the 88.13 trillion won expected by LSEG SmartEstimates, with revenue reaching 171.5 trillion won against expectations of 172.65 trillion won. Operating profit surged 1,814% year on year, while revenue rose 130%.
Samsung said it expects industry memory supply constraints to persist through 2027 and into 2028, driven by exponential growth in demand for AI infrastructure. The company said it scaled up sales of its sixth-generation HBM4 chips and shipped the industry's first HBM4E samples to major customers, including for use in Nvidia's Vera Rubin Platform.
"The AI infrastructure buildout is still paying its suppliers handsomely, and Samsung expects more to come, pointing to strong memory demand in the second half as agentic AI adds another layer of appetite for its chips," said Josh Gilbert, lead analyst for APAC at eToro.
In Hong Kong, Chinese optical transceiver maker Zhongji Innolight slipped 5% on its first trading day Thursday after completing a HK$53.4 billion ($6.8 billion) IPO — Asia's second-largest listing this year, behind Chinese memory-chip maker CXMT's $8.6 billion Shanghai debut. The company priced its shares at HK$980 each, below the maximum indicated price of HK$1,010, and holds a 21.2% share of the global optical interconnect solutions market by revenue, according to consultancy CIC.
Together, the day's results reflect a technology sector in which AI capital expenditure is beginning to produce measurable returns for some companies while pushing others into a period of financial strain — a dynamic that analysts say is unlikely to resolve uniformly heading into the second half of 2026.
TechEchelon Staff bylines are produced collectively by the newsroom for short, breaking, and wire-style coverage. Longer-form reporting is published under the responsible reporter's name.
More from the Staff →Microsoft reported fiscal Q4 revenue of $90.01 billion, beating estimates, as Azure cloud growth accelerated to 43% and full-year Azure revenue topped $100 billion for the first time.
Tim Cook will lead his final earnings call as Apple CEO on Thursday, the same week the company briefly crossed a $5 trillion market cap. Cook steps down Sept. 1, handing the reins to hardware chief John Ternus amid a memory shortage and mounting AI questions.
SK Hynix plunged more than 10% in Seoul on Tuesday as a broad selloff in semiconductor stocks spread across Asian markets, extending losses from Wall Street amid growing uncertainty over AI data center spending.
Written for readers who already know the basics — markets, AI, and the policy decisions that shape both.