In the latest quarterly earnings season, two of Big Tech’s biggest spenders on artificial intelligence — Meta Platforms and Microsoft — reported strong financial results but received starkly different market reactions. Meta’s improved advertising revenue, driven in part by AI‑powered ad targeting, helped fuel a sizeable share price increase as the company announced plans to massively ramp up AI‑related capital expenditures in 2026. Analysts have highlighted that Meta’s AI spending appears tied to tangible business growth, which has reassured investors despite the scale of the investment.
Meta said its capital expenditures for 2026 could reach $115 billion to $135 billion, nearly double what it spent the previous year, largely to build out data centres, global infrastructure, and AI model development labs. Its robust 24 percent year‑over‑year revenue growth last quarter and optimistic guidance for the current quarter — including expected acceleration in sales — helped buoy confidence that its AI strategy is beginning to pay off via stronger engagement and monetization.
Microsoft, by contrast, saw its stock slide sharply despite beating revenue and profit expectations, as investors reacted nervously to its surging AI spending and slower‑than‑expected cloud growth. The company reported a substantial increase in capital expenditures — driven by AI and cloud infrastructure outlays — but Azure’s growth rate fell slightly short of some forecasts. Market participants expressed concern that Microsoft’s heavy investment might not translate quickly into proportional revenue growth, especially given its deep financial ties to OpenAI and the high cost of running AI workloads.
These contrasting reactions illustrate a broader shift in how investors evaluate AI spending: it’s no longer enough for companies simply to pour money into infrastructure and models. Financial markets now appear to reward those that can show clear, near‑term business results from AI investments, while punishing firms where returns are still speculative or infrastructure‑heavy without commensurate growth signals. This has created a new investor calculus defining AI “winners and losers” based on tangible payoff rather than just scale of spending.
