US EditionUPDATE 3-Microsoft Plunges, Meta Rallies as Investors Demand AI Payoffs
Meta's AI spending was rewarded due to strong advertising revenue, while Microsoft and Tesla faced investor skepticism amid slowing core business and revenue declines, analysts said.
- On Wednesday, Meta, Microsoft and Tesla reported within five minutes, focusing markets on AI progress and making it the primary concern for investors.
- With tangible AI returns still missing, markets pressed companies for answers as investors sought reasons to preserve optimism while firms spend heavily on AI without clear ROI.
- After Meta's strong reception, Microsoft reported slowing Azure growth and disclosed much larger-than-expected AI spending, causing Microsoft's stock to fall.
- Despite a bottom-line beat, Tesla's weaker revenue and $2 billion xAI investment unnerved some investors as its core business declined.
- By leaning on its advertising business, Meta bought time to pursue AI ambitions, and Meta CFO Susan Li said the company will fund AI primarily with cash, gaining market acceptance this quarter.
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UPDATE 3-Microsoft plunges, Meta rallies as investors demand AI payoffs
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Investors monitor Big Tech’s AI investments, with Meta thriving while Microsoft and Tesla face uncertainty over growth and returns. Investors are reacting sharply to Big Tech earnings this week, sending a clear signal that massive spending must translate into real growth. Markets are becoming less forgiving as companies pour billions into artificial intelligence, data centres and future tech while returns remain uncertain. Meta has delivered a s…
Strong Earnings, $130B AI Fuels 7% Rally
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