Microsoft and Meta earnings drive $500B AI Stock Surge

Following their quarterly results, which demonstrated that their enormous efforts in artificial intelligence were paying off, IT giants Microsoft and Meta Platforms fuelled a US$500 billion surge in AI stocks on July 30.

The stock market worth of Wall Street’s AI giants increased by a total of half a trillion dollars late on Wednesday, following quarterly reports from Meta Platforms and Microsoft that demonstrated the success of significant investments in cutting-edge technology.

The market prices of the two Magnificent Seven businesses increased by US$288 billion and US$152 billion, respectively, while Microsoft was up 8% and Meta was up 9% in extended trading.

Leading AI chipmaker Nvidia, the most valuable corporation in the world, increased by 1%, while Amazon, which released its earnings on Thursday, increased by more than 2%.

As they compete to dominate artificial intelligence, the most valued businesses on the U.S. stock market have seen a sharp increase in share prices in recent years, and investors are impatient to see results from their enormous investments.

Driven by its high-stakes pursuit of “superintelligence” in the fierce AI race, Meta estimated quarterly revenue far ahead of Wall Street estimates and boosted the lower end of its annual capital expenditures prediction by $2 billion, igniting the late-day euphoria for AI-related companies. These days, it anticipates spending between US$66 billion and US$72 billion.

With its Azure cloud computing division driving sales and powering revenue over Wall Street’s projections and demonstrating the increasing returns on its AI investments, Microsoft also produced a stunning quarterly report.

As AI continued to bolster its core advertising business, the parent company of Facebook and Instagram also projected third-quarter revenue of US$47.5 billion to US$50.5 billion, significantly exceeding Wall Street projections.

With its Azure cloud computing division driving revenue over Wall Street’s estimates and demonstrating the increasing returns on its AI bets, Microsoft released a stunning quarterly report on July 30 that forecasted a record US$30 billion in capital spending for the current fiscal first quarter.

Microsoft claims that it is on track to surpass its competitors in spending over the coming year thanks to its higher-than-expected capital expenditure plan, which was its largest-ever for a single quarter. It followed Google’s announcement that it will raise data center spending to match the demand for AI services and Meta’s prediction of better sales with just slight increases in spending.

With capital investment expected to exceed US$330 billion in 2025, the three findings may help investors decide if Big Tech is reaping the benefits of its vast data center buildout.

Amazon Web Services, which had a head start in cloud computing and generated US$107.56 billion in its most recent fiscal year, is still ahead of Microsoft’s cloud division. Investors, however, claimed that Microsoft’s latest revenue figure shows that its expenditures are paying off in the form of more sales.

Last week, rival Alphabet’s earnings demonstrated that while AI spending was increasing, so were profits, as the company exceeded revenue projections and increased its outlay prediction by US$10 billion.

According to Microsoft, the investment is essential to resolving supply issues that have limited its capacity to satisfy the rapidly increasing demand for AI. Its capital investment increased 27% to US$24.2 billion in the just concluded fiscal fourth quarter.

The company’s exclusive access to OpenAI’s technology has allowed it to become a pioneer in the revenue-generating potential of AI. Microsoft has been able to quickly introduce AI products like its M365 Copilot AI assistant for corporations thanks to the partnership, which has also helped draw a large number of organizations to its cloud service.

With its shares up almost 20% in 2025, Microsoft is only $200 billion away from being the second company after Nvidia to reach a US$4 trillion valuation.

However, as the firms renegotiate the agreement and the start-up transfers some workloads to competitors like Google and Oracle, investor skepticism regarding the OpenAI partnership has grown.

The two are reportedly at odds over how much control Microsoft will have over OpenAI’s technology and its ownership position in the company should it become a public-benefit organization, according to media sources.

By creating its own AI technology and expanding its model line-up with partners like xAI, Meta, and France’s Mistral, Microsoft has attempted to lessen its dependency on OpenAI. These partners host their models on Azure for customers.