Nasdaq 100: Microsoft and Meta Earnings Today—Will AI Investments Pay Off?

Microsoft and Meta: Key Earnings Reports and Market Trends

Microsoft and Meta are set to report their latest earnings after the market close on Wednesday, with investors closely watching their revenue growth, AI investments, and market positioning. Both tech giants have seen strong stock performance in 2025, with Microsoft up 6% and Meta surging 14% since late October. However, concerns over AI competition and spending continue to shape investor sentiment.

Microsoft: Slowing Cloud Growth and AI Investments

Microsoft is expected to report earnings per share (EPS) of $3.11 on revenue of $68.78 billion, representing approximately 11% year-over-year growth—its slowest pace since mid-2023. The slowdown is partially due to a delay from a third-party provider affecting Azure’s cloud growth, with analysts predicting a deceleration from 33% in Q1 to about 31% this quarter.

Despite the slowing cloud growth, Microsoft has maintained its AI momentum,announcing new cloud-based Windows solutions and expanding its AI capabilities with GitHub. The company has committed $80 billion to AI infrastructure this fiscal year but faces emerging competition from Chinese AI models like DeepSeek, which claim to be more efficient than OpenAI’s offerings. CEO Satya Nadella acknowledged these developments as significant threats, adding pressure on Microsoft’s AI investments.

Technical Analysis: Microsoft (MSFT)

Microsoft’s stock has been volatile, recently declining 2% amid AI competition concerns. The stock is trading around $444.75, just above its 50-day simple moving average (SMA) of $431.64 and its 200-day SMA of $425.77. This suggests MSFT is maintaining an upward trend but faces resistance near recent highs. A breakout above $450 could signal further upside, while a drop below the 50-day SMA might indicate short-term weakness.

Meta: AI Spending and Advertising Growth

Meta is forecast to post an EPS of $6.77 on revenue of $47.03 billion, reflecting strong 17% year-over-year growth. Investors are particularly focused on Meta’s AI strategy, as CEO Mark Zuckerberg recently committed to spending $60–$65 billion on AI infrastructure in 2025. While this heavy spending initially raised concerns, recent stock performance suggests investors are becoming more tolerant, provided it continues to drive advertising growth.

Meta’s AI investments have been instrumental in boosting ad revenue, differentiating it from cloud-based AI providers like Microsoft. Additionally, Meta is capitalizing on TikTok’s regulatory challenges in the U.S., offering incentives for creators to promote Instagram Reels and testing ads on its Threads platform. However, its relaxed content moderation policies could pose risks to advertiser confidence.

Technical Analysis: Meta (META)

Meta’s stock has been on a strong bullish trend, currently trading at $677.70, well above its 50-day SMA of $605.07 and 200-day SMA of $538.83. This confirms a strong uptrend, with recent breakouts suggesting continued momentum. If META maintains support above $670, the rally could extend toward $700. A pullback toward the 50-day SMA would still keep the long-term bullish outlook intact.

Market Outlook: Bullish but Cautious

Both Microsoft and Meta are positioned for growth, but investor sentiment remains cautious. Microsoft’s earnings report will be pivotal in assessing whether its AI spending can offset slowing cloud growth, while Meta’s high capital expenditures must translate into sustained ad revenue gains.

From a technical perspective, Meta appears stronger with a clearer bullish trend, while Microsoft faces some resistance. Short-term traders will be watching Microsoft’s reaction to earnings, while long-term investors may see Meta’s AI strategy as a more compelling growth driver.

More Information in our Economic Calendar.