Meta, Microsoft Spike On Robust Earnings Reports—As Microsoft Reclaims Crown As World’s La
May 1, 2025
Topline
Shares of Meta and Microsoft surged Thursday after earnings for two of the U.S.’ handful of trillion-dollar companies came in well above expectations, kicking off a crucial week for on-edge big technology stocks as tariffs complicated investor appetite for artificial intelligence-driven growth.
Key Facts
Microsoft stock shot up 10% shortly after Thursday’s market open, trading at about $435, with JPMorgan analyst Mark R. Murphy saying “investors had become too pessimistic” on Microsoft heading into earnings.
Meta stock gained about 7% to nearly $590 as both West Coast titans enjoyed a bump from Wednesday afternoon earnings reports, which far exceeded what analysts anticipated.
Microsoft reported its best-ever quarterly revenue and profit totals, generating $70.1 billion in revenue and $3.46 EPS ($25.8 billion net income), compared to consensus forecasts calling for $68.4 billion in revenue and $3.22 earnings per share ($24.1 billion net income) for Microsoft, according to FactSet data, scoring a 13% year-over-year increase in sales and 18% jump in profit.
Meta, the parent of Facebook, also exceeded Wall Street expectations, as its $42.3 billion in revenue and $6.43 EPS smashed forecasts of $41.4 billion in revenue and $5.23 EPS, and the company said it expects second-quarter revenue to come in between $42.5 billion and $45.5 billion, well above consensus projections of $41.3 billion.
The tech-heavy Nasdaq Composite rose 2% on the back of the Meta and Microsoft surge, hitting its highest level since late March.
Big Number
$380 billion. That’s how much market capitalization Microsoft (about $280 billion) and Meta (about $100 billion) gained Thursday.
Surprising Fact
Microsoft surpassed iPhone maker Apple as the world’s most valuable company following the earnings rally.
Crucial Quote
“Meta has been busy playing dodgeball: The company is busy diving out of the way of changing advertiser behavior tied to tariffs and consumer spending, trying to duck emerging regulatory curveballs out of Europe and the US, and dodging margin compression by reigning in full year expenses,” Bernstein analysts Jenny Ku and Mark Shmulik wrote in a note to clients Thursday.“If you can dodge tariffs you can dodge a ball,” added the analysts.
Key Background
Meta and Microsoft are two of the so-called “magnificent seven” big tech companies, joining Google parent Alphabet, Amazon, Apple, Nvidia and Tesla. The septet comprises a third of the S&P 500’s total market capitalization thanks to their outsized influence in the artificial intelligence bonanza. Microsoft makes its AI hay via its Azure enterprise cloud computing unit and its stake in ChatGPT parent OpenAI, while Meta just launched a competitor app to the generative AI dominator ChatGPT, Meta AI. Meta and Microsoft shares had both slumped this year amid the broader stock market pullback as investors’ risk profile weakened. Meta and Microsoft stocks declined 5% year-to-date apiece through Wednesday, excluding dividends, though that’s stronger than the 15% or more losses from Amazon, Apple and Nvidia, all of which have far heavier exposure to China than Meta and Microsoft.
Tangent
Meta CEO Mark Zuckerberg and former Microsoft CEO Steve Ballmer were among the 10 billionaires whose net worth fell the most during President Donald Trump’s first 100 days, losing a combined $30 billion, according to Forbes’ calculations.
What To Watch For
Thursday will be another magnificent seven earnings doubleheader, as retail titan Amazon and Apple will share quarterly results.
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