Meta and Microsoft Soar on Strong Earnings, Fueled by AI Investments

Meta, Microsoft roar higher on strong earnings as AI spending booms

Microsoft topped the $4 trillion market cap benchmark with the move, joining Nvidia in the club. Both Meta and Microsoft have been investing heavily in artificial intelligence infrastructure in recent years, and the companies said they expect to continue to shell out billions in capital expenditures. Meta said capital expenditures will range between $66 billion and $72 billion for the full year, raising the low end of the company's previous estimate of between $64 billion and $72 billion. Microsoft sees over $30 billion in fiscal first quarter capital expenditures and assets acquired through finance leases, while analysts surveyed by Visible Alpha had expected $24.23 billion. Analysts at Citi said the companies' increased capital expenditures will likely be a boon for chipmakers. Microsoft makes up roughly 8% of Advanced Micro Devices' sales, while Meta makes up about 2% of Broadcom's sales, the analysts said. "We believe AVGO and AMD will be the primary beneficiaries of Microsoft's and Meta's increased capex," they wrote in a Thursday note.

Microsoft, Meta Stocks Add $440 Billion In A Day -- Nearly Matching Netflix's Entire $503 Billion Market Cap - Costco Wholesale (NASDAQ:COST), Home Depot (NYSE:HD)

Microsoft Corp. MSFT and Meta Platforms Inc. META added over $400 billion in market capitalization after reporting robust earnings results on Wednesday, powered by artificial intelligence progress and roadmap, which is more than several big companies listed on the stock exchanges. Check out MSFT and META stock prices here. What Happened: Satya Nadella-led Microsoft soared after reporting its results during after-hours on Wednesday, adding nearly $265 billion, whereas Mark Zuckerberg's Meta Platforms also rallied after its results, adding nearly $175 billion in investor wealth. These Magnificent 7 companies together gained about $440 billion in market capitalization, which compares to the total market cap of $503.19 billion of another Big Tech firm, Netflix Inc. NFLX. This single-day after-hours addition of $440 billion surpassed the market cap of big U.S. firms like Costco Wholesale Corp. COST at $411.32 billion, Johnson & Johnson JNJ at $402.81 billion, Palantir Technologies Inc. PLTR at $374.30 billion and Home Depot Inc. HD at $370.19 billion. In fact, only 20 firms worldwide had a market cap of over $440 billion according to the data by companiesmarketcap.com. See Also: Bitcoin Miner IREN Could Surge 1,572% As SOTP Valuation Pegs $300 Target -- Hedge Fund Manager Eric Jackson Says, 'We're Cooking With Gas' Why It Matters: These hyperscalers, operating massive and highly scalable data centers to deliver cloud computing and other digital services worldwide, while leveraging AI, have led to a positive outlook by investors and experts alike. Meta reported second-quarter revenue of $47.52 billion, beating estimates of $44.58 billion, with earnings of $7.14 per share versus expectations of $5.79. Microsoft reported fourth-quarter revenue of $76.44 billion, exceeding the $73.80 billion estimate, with EPS of $3.65 compared to $3.37 expected. Wedbush Securities' Daniel Ives also hailed the earnings by these technology giants and said that their results validated his "AI Revolution bull thesis into next few years." Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started CNBC's 'Mad Money' host Jim Cramer, who began his career at Goldman Sachs more than four decades ago, compared his early impression of Wall Street talent to Zuckerberg, Nadella, and their tech executives. "When I went to work at Goldman Sachs 43 years ago, I thought everyone was so darned smart. They were. But not at the level of a Zuckerberg or a Nadella," he said. "My head is spinning as I try to take in what they teach. They are extraordinary," he added. Price Action: Shares of Microsoft jumped by 8.64% in premarket on Thursday, while Meta soared by 12.12%. MSFT had gained 22.61% on a year-to-date basis, while it was up 22.68% over the past year. Meta, on the other hand, was up 16.02% YTD and 46.41% over a year. Benzinga's Edge Stock Rankings indicate that MSFT maintains a strong momentum across the short, medium, and long term. However, the stock scores poorly on value rankings. Additional performance details are available here. Benzinga's Edge Stock Rankings indicate that META also maintains a strong price trend across the short, medium, and long term. However, the stock scores badly on value rankings as well. Additional performance details are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Thursday. The SPY was up 0.93% at $640.35, while the QQQ advanced 1.36% to $575.76, according to Benzinga Pro data. Read Next: Warren Buffett Has 56% Of His $258 Billion Portfolio's Value Exposed To AI: Here Are The 5 Stocks That Are Leveraging AI Within Berkshire's Holdings Image Credit: Imagn Images COSTCostco Wholesale Corp$923.65-0.42%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum56.77Growth50.98Quality81.09Value29.62Price TrendShortMediumLongOverviewHDThe Home Depot Inc$370.30-0.48%JNJJohnson & Johnson$166.25-0.60%METAMeta Platforms Inc$774.3811.4%MSFTMicrosoft Corp$557.238.57%NFLXNetflix Inc$1181.40-0.24%PLTRPalantir Technologies Inc$160.341.09%QQQInvesco QQQ Trust, Series 1$575.461.31%SPYSPDR S&P 500$640.070.88%Market News and Data brought to you by Benzinga APIs