Microsoft and Meta beat earnings expectations despite economic concerns
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Shares of Microsoft and Facebook owner Meta Platforms jumped Wednesday after the companies separately delivered strong earnings reports despite concerns about the economy.
Why it matters: Economic uncertainty stemming from President Trump's trade war is hovering over the stock market as investors look for signs of how increased tariffs are affecting businesses.
The big picture: Microsoft and Meta gave no indications of a growth slowdown as the AI economy continues to surge.
- Microsoft posted quarterly revenue of $70.1 billion, up 13% from a year ago, and net income of $25.8 billion, up 18%. Both figures beat S&P Capital IQ analyst expectations.
- Meta recorded quarterly revenue of $42.3 billion, up 16%, and net income of $16.6 billion, up 35%. Both marks exceeded analyst expectations.
- "We've had a strong start to an important year, our community continues to grow and our business is performing very well," Meta CEO Mark Zuckerberg said in a statement.
Zoom in: Meta projected that its 2025 capital expenditures will rise from a previous range of $60 billion—$65 billion to a new range of $64 billion—$72 billion, reflecting "additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware."
- But the company also lowered its 2025 projected range of overall expenses.
At Microsoft, revenue in the company's server products and cloud services segment soared 22% as the company's Azure service grows in popularity.
- Overall revenue in the "intelligent cloud" segment was up 21%.
The impact: Microsoft's stock rose 5.5% in after-hours trading at 4:20pm, while Meta was up 3.3%.
Yes, but: Microsoft noted in an earnings presentation that inventory levels in its Windows OEM and Devices segment remain "elevated due to tariff uncertainty."
