Meta and Microsoft posted strong second-quarter results this week, signaling the accelerating influence of artificial intelligence on their bottom lines and long-term strategies.
Meta reported a 22 percent year-over-year revenue jump to $47.5 billion, with net profit climbing to $18.3 billion from $13.5 billion a year ago. The company attributed the growth to improved advertising performance and increasing user engagement across Facebook, Instagram, WhatsApp, and Messenger, which reached 3.48 billion daily active users in June.
“We’ve had a strong quarter both in terms of our business and community,” said Meta CEO Mark Zuckerberg. “I’m excited to build personal superintelligence for everyone in the world.”
Investors responded positively, pushing Meta shares up by as much as 10 percent in after-hours trading. A large portion of Meta's capital expenditure, $17 billion in the quarter was directed toward AI infrastructure as Zuckerberg deepens the company’s push into artificial intelligence.
Zuckerberg’s AI strategy includes building a team focused on superintelligence, led by Alexandr Wang, former CEO of Scale AI. Meta invested $14.3 billion in Scale AI earlier this year.
While the company’s core ad business is performing well, Reality Labs, its metaverse division, posted a $4.5 billion loss on just $370 million in revenue. The steep loss has reignited comparisons between Meta’s AI and metaverse strategies, both of which required large upfront investments with uncertain timelines.
Some analysts praised Meta’s approach. “Capital expenditures are still shockingly high, but with these strong results, Meta has bought itself more time with investors,” said Debra Aho Williamson, chief analyst at Sonata Insights.
Others expressed concern. “A strong quarter won’t shield Meta from questions concerning the company’s future as it breathlessly tries to keep up in the AI race,” said Emarketer analyst Minda Smiley. “Investors and other stakeholders will press for more details on Meta’s ‘superintelligence’ ambitions namely, what exactly they entail and how they align with the company’s broader business roadmap.”
Meanwhile, Microsoft also delivered impressive results. Its net profit rose to $27.2 billion on revenue of $76.4 billion, driven largely by its Intelligent Cloud segment, which generated nearly $30 billion in the quarter.
“Cloud and AI is the driving force of business transformation across every industry and sector,” said Microsoft CEO Satya Nadella. “We’re innovating across the tech stack to help customers adapt and grow in this new era.”
Microsoft’s Azure cloud unit posted a 34 percent year-over-year increase, bringing in more than $75 billion for the company’s fiscal year. Analysts expect continued gains as businesses increase spending on AI.
“This was a slam-dunk quarter for Microsoft with cloud and AI driving significant business transformation across every sector and industry,” said Dan Ives of Wedbush Securities.
To support its AI ambitions, Microsoft projected nearly $80 billion in capital and infrastructure spending this fiscal year. The company also emphasized the importance of securing energy sources to power expanding data centers.
Despite strong earnings, Microsoft has undertaken job cuts in recent months, reducing layers of middle management to streamline operations and adapt to AI-driven workflows.
With AI at the center of both companies’ growth stories, investors and industry analysts are watching closely to see which strategies deliver sustainable returns in an increasingly competitive landscape.