Shares of artificial intelligence leaders Microsoft and Meta Platforms surged in European trading following the release of their blockbuster quarterly earnings, signalling strong investor confidence in their AI-driven business models.

Meta’s shares jumped over 12% in Frankfurt after the company forecast quarterly revenue well above Wall Street estimates. The social media giant reported first-quarter 2025 revenue of $42.31 billion, up 16% year-over-year, largely powered by its AI-enhanced ad platform and a 16% growth in its Family of Apps, including Facebook and Instagram. Meta also raised its annual capital expenditure outlook by $2 billion, reflecting its ambitious investments in AI supercomputing infrastructure aimed at driving long-term innovation. CEO Mark Zuckerberg described the results as a “strong start” to the year, highlighting how AI improved ad targeting and user engagement despite ongoing losses in its Reality Labs division, which is now renamed “AI and Immersive Technologies.” This commitment to AI has helped Meta add $152 billion in market value recently, underscoring the market’s belief in the company’s AI-powered growth strategy.

Microsoft’s shares rose by around 9% after it reported record first-quarter 2025 revenue of $70.1 billion, a 12-13% year-over-year increase. The surge was largely driven by its Azure cloud computing segment, which saw revenue increase by approximately 33%, marking a structural shift towards AI-centric services. Azure’s AI-powered offerings, including GitHub Copilot and Azure AI services, contributed an estimated $13 billion in annualized revenue, with its Intelligent Cloud segment hitting $26.8 billion—up 21%. Despite some investor concerns expressed later about slowing Azure growth and cautious forecasts, the company’s results beat analysts’ expectations and underscored strong returns from Microsoft’s AI investments and cloud infrastructure expansion. CEO Satya Nadella’s vision of embedding AI across Microsoft’s ecosystem, from Office applications to Dynamics tools, appears to be bearing fruit, with operating margins reaching 41%—a testament to the scalability and efficiency of the cloud business. Microsoft’s market value jumped by nearly $288 billion following the results, reflecting widespread optimism about the company’s growth trajectory in AI.

These positive earnings reports from Microsoft and Meta helped lift broader market sentiment, with Wall Street futures for the S&P 500 and Nasdaq rising by 1% and 1.3%, respectively. The surge also propelled Big Tech ETFs to new highs, as investors increasingly view AI as the next frontier for technological innovation and growth. Both companies have embarked on aggressive capital expenditure plans for AI infrastructure in 2025, with Microsoft committing approximately $80 billion to data center expansion and Meta guiding for $64 to $72 billion, prioritizing AI supercomputing facilities to sustain long-term competitive advantages.

However, not all sentiment remains uniformly bullish. Some analysts have expressed caution over Microsoft’s cloud growth trajectory, noting a recent slowdown that raised questions about the company's AI workload strategy versus core cloud demand. Despite these concerns, Microsoft's strong earnings and AI integration efforts have maintained investor confidence.

Overall, the stellar performances of Microsoft and Meta demonstrate their dominance in the AI and cloud computing space, with their latest results highlighting how deeply artificial intelligence is intertwined with their revenue growth and future strategies. As both navigate regulatory challenges and economic uncertainties, their commitment to AI-driven innovation seems set to keep them at the forefront of the tech sector for the foreseeable future.

📌 Reference Map:

Source: Noah Wire Services