Microsoft's record market surge splits AI trade with Meta
Microsoft shares jumped about 15% after strong Azure and Copilot results, while Meta sank nearly 8% on soft guidance—widening an AI market split. Microsoft added nearly $450 billion in value, the biggest one-day gain on record, as investors rewarded proven AI returns over Meta's costly buildout.
Key Takeaways
- Microsoft stock rose about 15% after Azure grew 43% and Microsoft 365 Copilot passed 30 million paid seats.
- The company added nearly $450 billion in market value Thursday, the largest one-day gain in stock market history.
- Meta shares fell nearly 8% for an 11th straight losing session, extending a record streak and a drop of more than 20% over that span.
- Meta guided current-quarter revenue to $61–$64 billion, below the $63.15 billion analysts expected, while free cash flow plunged 91% year on year to $784 million.
- Investors are splitting the AI trade between firms showing monetization and those still deep in heavy spending.
Why did Microsoft jump while Meta sank?
Microsoft and Meta delivered opposite earnings stories that the market treated as a clear AI verdict, according to CNBC. Microsoft posted fiscal fourth-quarter revenue that beat estimates and reported 43% growth at Azure, ahead of expectations. It also said Microsoft 365 Copilot now has over 30 million paid seats, up from more than 20 million as of April.
Tracy Woo, a principal analyst at Forrester, said the strong revenue and accelerating Copilot adoption signal that Microsoft's $190 billion data-center buildout is beginning to deliver returns. Shares still jumped even as Microsoft reiterated its 2026 capital expenditure forecast and flagged a possible spending expansion in fiscal 2027.
Meta missed investor expectations on earnings and on revenue guidance. The company expects this quarter's revenue between $61 billion and $64 billion—$62.5 billion at the midpoint—versus the $63.15 billion analysts wanted, according to LSEG. Free cash flow plunged 91% year on year to $784 million as AI spending continued.
How big was Microsoft's market move?
According to Bloomberg, Microsoft added roughly $450 billion in market capitalization as shares soared about 16%, the biggest one-day value gain of any stock. That eclipsed Nvidia's prior $440 billion addition after a tariff pause announcement last year. CNBC reported a roughly 15% jump and nearly $450 billion added, calling it Microsoft's best day since 2008.
What does Meta's losing streak mean for the AI trade?
Meta's stock sank for an 11th day, continuing a record losing streak, and is down over 20% across that run. CEO Mark Zuckerberg said Meta is getting many offers for compute at a significant premium to what it paid, hinting it could lease excess capacity—though details were scarce. He also said the company must keep compute for its own products.
Ben Barringer of Quilter Cheviot said Zuckerberg's narrative is light on detail and future-facing, with costs and revenues looking volatile even as Meta remains important in AI. For more on how Big Tech is reshaping AI investment, see BlasterPost's Future Tech & AI Wonders coverage.
Taken together, the session shows the market is no longer rewarding AI ambition alone. Microsoft's cloud and Copilot traction won a historic valuation spike, while Meta's softer guidance and cash-flow squeeze deepened a selloff. The AI trade is splitting between proven returns and unfinished buildouts.