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Both Meta Platforms and Microsoft soared today after the two Magnificent 7 members reported stellar earnings, showing investors that the AI trade is as alive and well as Nicolandria from Love Island.
Meta rose 11.25% after it reported 22% revenue growth in Q2, thanks to its still-booming advertising business. The news was a lifeline for the social media giant, which was down 6% over the past month thanks in no small part to Mark Zuckerberg’s new habit of offering gargantuan pay packages to AI researchers, according to the Wall Street Journal.
Zuck has been recruiting AI star researchers to help his new Superintelligence lab get off the ground, while Meta also recently acquired a 49% stake in Scale AI, an AI data startup, for just under $15 billion. He’s in a race with the rest of big tech to snag as many star AI recruits as he can in order to turn a profit on the hefty investments he’s made in AI.
And boy oh boy, are those investments hefty: Meta Platforms said its full-year capex will come in between $66 billion and $72 billion—a slight increase on the lower end compared to the $62 billion to $72 billion the company previously forecast. But keeping the higher end of the spending projection steady assuaged investors’ fears that the giant is overestimating demand for cost- and energy-intensive data centers.
Still, you’ve got to spend money to make money, and Meta is making money these days—the company expects revenue to grow 17% to 24% during the current quarter.
Welcome to the club
If you thought Meta’s earnings were an impressive flex, just look at Microsoft. The House that Gates Built reported such great numbers that investors sent its market cap past $4 trillion for the first time ever, where it joins Nvidia, which became the first company to hit the milestone just a few weeks ago. Shares climbed 3.95% today, and overall Microsoft has climbed 26.57% in 2025.
The company reported 18% revenue growth, its fastest rate of expansion in three years, according to CNBC. But the biggest headline was perhaps in its Azure cloud revenue, which surged a staggering 39%.
And don’t forget Microsoft’s own data center spending spree: Its capex this quarter reached a record $30 billion, surpassing expectations of $23.75 billion.
Unsurprisingly, both Meta and Microsoft have “buy” ratings from the majority of analysts who cover the stocks, according to the WSJ.
Plenty of companies are reporting earnings this week, but it’s the AI trade—and big tech’s big spending—that continues to carry the S&P 500 on its back.—LB