Microsoft reported record quarterly profit and stronger-than-expected revenue growth, sending its shares sharply higher, while Meta Platforms posted a decline in profit as legal expenses and severance costs weighed on its results.
Microsoft shares rose as much as 10 percent in pre-market trading on Thursday after the company forecast faster growth for its Azure cloud business. The outlook provided investors with fresh evidence that the technology giant’s huge investments in artificial intelligence are beginning to generate stronger returns.
Microsoft expects revenue of between $89.85 billion and $90.95 billion for the July to September quarter, representing annual growth of 16 to 17 percent. Azure revenue is forecast to rise about 45 percent in constant currency, compared with 43 percent growth in the latest quarter.
The forecast followed a strong fiscal fourth quarter. Revenue increased 18 percent from a year earlier to $90 billion in the April to June period, exceeding the $87.6 billion expected by analysts.
Net profit climbed 31 percent to a record $35.8 billion. The result included a $3.2 billion unrealised gain on Microsoft’s investment in artificial intelligence company Anthropic. Diluted earnings reached $4.81 per share, compared with the $4.24 expected by analysts.
Microsoft Cloud revenue increased 27 percent to $59.3 billion, with Azure and other cloud services revenue rising 43 percent. The company said demand for Azure remained above available capacity even as additional computing infrastructure was brought online.
For the fiscal year ended in June, Microsoft recorded revenue of $331.8 billion.
Chief Executive Satya Nadella said Azure revenue exceeded $100 billion for the first time, while Microsoft 365 Copilot reached more than 30 million paid seats.
The results come as investors seek evidence that Microsoft’s heavy spending on AI infrastructure can generate lasting returns. Chief Financial Officer Amy Hood said the company’s capital expenditure expectations for 2026 remain unchanged, despite an accounting adjustment that will put the figure at about $175 billion.
Meta, meanwhile, reported a 14 percent decline in second-quarter profit despite revenue exceeding analysts’ forecasts.
The Facebook and Instagram owner earned $15.85 billion in the April to June period, down from $18.34 billion a year earlier. Revenue increased 28 percent to $60.8 billion, slightly above expectations.
Earnings of $6.18 per share fell short of the $7.19 forecast by analysts.
Meta’s costs and expenses jumped 55 percent to $42.03 billion. The company recorded $2.4 billion in legal expenses and $1.18 billion in severance costs linked to workforce reductions announced in May. Its operating margin narrowed to 31 percent from 43 percent a year earlier.
Meta Chief Executive Mark Zuckerberg said artificial intelligence was strengthening the company’s existing businesses and creating opportunities for new products and services. The contrasting results highlight differing investor reactions to the technology spending race, with Microsoft gaining confidence from strong cloud demand while Meta faces higher costs as it continues investing in AI.
