Microsoft and Meta reported on the same evening and moved in opposite directions. Microsoft rose about 8% after hours on fiscal fourth-quarter revenue of $90.01 billion, up 18%, with Azure growth accelerating to 43% and Azure crossing $100 billion in annual revenue for the first time, per the results coverage. Meta fell more than 7% even though Q2 revenue of $60.8 billion beat estimates, because diluted EPS of $6.18 missed the $7.22 forecast and profit fell 14%, per TradingKey. Meta also raised the low end of its 2026 capex to $130 billion.
The split is the story, and it is one test applied to two companies. Both are spending enormously on AI. Microsoft can point to Azure at 43% growth and past $100 billion as the revenue the capex produces, so the market rewarded the spend and let the steady capex guidance pass. Meta raised its capex floor to $130 billion while missing on earnings, so the market saw the spending without a matching revenue line and marked it down. This is the same referendum that hit Alphabet last week, where cloud growth was excellent but the capex hike scared the stock. Investors have stopped paying for AI capex on faith and now want the revenue that justifies it in the same quarter.
For the sector, the capex-tolerance window is narrowing to companies that can show the return. Microsoft has the cleanest story, because Azure turns AI spend into visible cloud revenue. Meta's spend flows into recommendation systems, Llama, and infrastructure whose payoff is real but diffuse and hard to point at in one line. That difference, more than the absolute dollar figures, is what separated the two reactions. The hyperscalers reporting next will be judged on the same axis: how legibly the spend converts into revenue, rather than how large it is.
Bottom Line
The market stopped grading AI capex on ambition and started grading it on receipts. Microsoft had them this quarter and Meta did not, which is the whole 15-point gap in how the two stocks reacted.