Microsoft stock soars as Meta sinks: Why the two AI giants are heading in opposite directions today

Microsoft stock rose while Meta stock fell after both reported quarterly earnings, as investors showed impatience with AI spending. Microsoft posted Q4 2026 revenue of $90 billion, up 18%, and adjusted EPS of $4.74, beating estimates, while Meta reported Q2 2026 revenue of $60.8 billion, up 28%, but EPS of $6.18 fell 13% and missed expectations, with free cash flow plunging 90% to $784 million due to massive AI capex. Microsoft's AI returns, including 30 million paid Microsoft 365 Copilot seats and 31% Intelligent Cloud growth, contrasted with Meta's lack of a cloud business and no significant AI ROI yet.

Yesterday, both Microsoft Corporation Nasdaq: MSFT and Meta Platforms, Inc. Nasdaq: META reported their most recent quarterly results. The companies are not only two of America’s biggest tech giants but also among the most significant players in the AI https://www.fastcompany.com/section/artificial-intelligence space. Yet the similarities end when you look at their stock prices this morning, which are moving in opposite directions. Here’s what you need to know, and why the companies’ stock movements suggest that investors are growing impatient with AI spending. Microsoft reported https://www.microsoft.com/en-us/Investor/earnings/FY-2026-Q4/press-release-webcast earnings for the Q4 2026 period, which ended on June 30. For the quarter, the software giant posted revenue of $90 billion, which was an increase of 18% from the same quarter a year earlier. Adjusted earnings per share EPS totaled $4.74, up 32%. Those numbers easily blew past what most analysts were expecting. As CNBC reported https://www.cnbc.com/2026/07/29/microsoft-msft-q4-earnings-report-2026.html , the LSEG consensus for Microsoft’s Q4 was revenue of $87.62 billion and adjusted earnings per share of $4.24. Meta, on the other hand, reported https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Reports-Second-Quarter-2026-Results/default.aspx its Q2 2026 results, which also ended on June 30. For the quarter, the parent company of Instagram, Facebook, and WhatsApp recorded revenue of $60.8 billion, which was up 28% year over year. Its earnings per share for the quarter were $6.18. The bright spots for Meta here were the 28% revenue growth and the fact that the LSEG consensus for revenue was just under $60.1 billion, notes https://www.cnbc.com/2026/07/29/meta-q2-earnings-report-2026.html CNBC. That meant Meta did post slightly more revenue than most analysts were expecting. Still, the social media company’s EPS of $6.18 represented a 13% decline from the same period a year earlier, and was well under the $7.22 expected. Despite seeing a 28% growth in revenue, Meta reported a massive EPS drop. Additionally, Meta’s free cash flow for the quarter totaled just $784 million. That is a staggering 90% drop from the same quarter a year earlier. Much of Meta’s free cash is being eaten up by its massive AI capex, which the company now says it expects to reach between $130 billion and $145 billion for the fiscal year as CEO Mark Zuckerberg continues to ramp up his AI ambitions. The problem for Meta is that, despite spending hundreds of billions on AI R&D, the company isn’t seeing any significant return on investment yet. And that’s making investors wary, especially as the AI boom is now approaching its half-decade mark. In the early days of the boom, investors were willing to wait years to see firm evidence of a future payoff, but those years have now passed. Microsoft is also massively spending on AI buildouts. For its Q2, Microsoft’s total capex hit $41 billion, about $10 billion more than Meta. And for its fiscal 2026, Microsoft spent about $175 billion on capex—significantly more than Meta intends to spend. Yet despite this capex, there are signs that Microsoft is already seeing some return on investment from its AI spend. As noted https://www.cnbc.com/2026/07/29/microsoft-msft-q4-earnings-report-2026.html by CNBC, Microsoft now says it has more than 30 million paid seats for its Microsoft 365 Copilot AI product. That’s up from more than 20 million in April. Microsoft also saw a massive surge in its Intelligent Cloud revenue of more than 31%, driven by Azure and other cloud computing services that companies are using to run their AI models. Meta, notably, has no cloud business, setting it apart from other so-called hyperscalers like Microsoft, Alphabet, and Amazon. In short, investors seem to feel that there are clear signs Microsoft is already benefiting from the AI boom, mainly from selling enterprise solutions, while any significant return on AI investment for Meta still seems far off. Such investor sentiment is no clearer today than in the companies’ stock prices. As of this writing, MSFT shares are up 9% to $426 in premarket trading. META shares, on the other hand, are currently down about 8.6% to around $535. Before today’s premarket stock price change, Meta’s shares were already trading down more than 11% for the year, and Microsoft’s shares were trading down nearly 20%. Neither of these premarket movements today is enough to get either company’s stock price back in the green for 2026, but it goes a long way in showing what investors now want to see when it comes to AI return on investment.