Microsoft and Meta Report Earnings as Investors Question AI Spending Payoff

Microsoft and Meta Platforms report second-quarter earnings today after the US market close, with combined 2026 capital spending guidance approaching $315 billion for artificial intelligence infrastructure. The results arrive a week after Alphabet and Tesla both fell 4 to 5% in after-hours trading on the same concern: whether AI spending is starting to generate revenue that justifies the cost.

What Happened

Microsoft reports fiscal fourth-quarter results, with analysts forecasting earnings per share between $4.22 and $4.24 on revenue of roughly $87.5 billion to $87.67 billion. Azure cloud growth remains the metric investors watch most closely, alongside customer adoption of Copilot and other AI products. Microsoft's calendar-year 2026 capital expenditure is projected near $190 billion.

Meta reports second-quarter results the same day, with EPS estimates between $7.18 and $7.24. The company recently raised its full-year 2026 capex outlook to a range of $125 billion to $145 billion to fund AI infrastructure, data centres, and computing capacity, a figure that drew sharper scrutiny than Microsoft's spending plans because Meta has offered less detail on how newer AI products will generate revenue.

Both reports follow a rough week for chip and AI-linked stocks. South Korea's Kospi fell 10.84% on Tuesday, with Samsung Electronics down more than 13% and SK Hynix down 14.65%, as the Philadelphia Semiconductor Index dropped 4%. The Nasdaq 100 flirted with a technical correction before recovering some ground Tuesday, when the Dow closed up 0.5% to 52,210.08.

Why It Matters

Microsoft, Meta, Alphabet, and Amazon together account for a large share of the weight in most global index funds and retirement portfolios. When their capital spending plans and earnings diverge from analyst expectations, the swing shows up directly in diversified equity holdings, not just in single-stock positions.

• Alphabet and Tesla fell 4-5% after hours last week on the same AI-spending concern now facing Microsoft and Meta
• Intel beat estimates by a wide margin the same week, reporting $0.42 adjusted EPS against a $0.21 forecast and $16.1 billion in revenue against $14.42 billion expected
• Combined Microsoft and Meta 2026 AI capex guidance runs to roughly $315 billion

The pattern investors are testing for is whether heavy spending on data centres and chips converts into revenue before it erodes profit margins. Microsoft's Azure growth has so far met that bar. Meta's newer AI products have not yet shown the same clarity.

What to Watch Next

Amazon and Apple report Thursday, completing the round of major AI-spending updates for the quarter. The Federal Reserve also announces its rate decision this afternoon, adding a second variable to a week already testing how much uncertainty markets will tolerate before repricing AI-linked equities more broadly.

Portfolio trackers that consolidate holdings across index funds and individual positions make it easier to see how concentrated AI exposure has become in a single portfolio, rather than discovering it only when a handful of stocks move the total.