Tech Titans Split: Meta Tanks, Alphabet Rallies, Microsoft Stalls Despite Solid Beats

Tech Giants Post Solid Quarters — But Only Some Win Over Wall Street

Big Tech earnings were a mixed bag for traders this week. Meta crushed revenue expectations but sold off hard. Alphabet hit a major revenue milestone and rallied. Microsoft delivered across the board, but shares dipped. All three posted strong cloud and AI-related numbers — yet the market picked favorites fast.

Why did Meta sell off despite a strong quarter?

Meta’s Q3 results looked solid on the surface: $51.24 billion in revenue (up 26% YoY) and $7.25 in adjusted EPS, both above expectations. Advertising came in hot at $50.08 billion, and user engagement held up, with 3.54 billion daily active people across its apps.

But the stock fell 9% after the company disclosed a $15.93 billion one-time, non-cash tax charge tied to the “One Big Beautiful Bill” act. Even though Meta said the bill would significantly reduce future cash tax payments, the headline hit was too large to ignore. Traders also didn’t love the update on spending — expenses were guided higher to $116–$118 billion, and 2025 CapEx was raised to as much as $72 billion. Add another $4.4 billion loss from Reality Labs, and the margin story gets muddy fast.

Bottom line: Meta beat, but rising costs and unclear ROI from AI and VR spending pushed buyers to the sidelines.

Why did Alphabet get a pass — and a pop?

Alphabet came in clean. Revenue topped $100 billion for the first time ever, landing at $102.35 billion, with YouTube and Google Cloud both beating expectations. EPS printed $2.87 — not directly comparable to estimates but still solid. Shares rose 5% in after-hours trading.

Cloud revenue jumped 35% YoY to $15.15 billion, driven by AI demand. The company now sees 2025 CapEx hitting $91–$93 billion, up from prior guidance of $85 billion. That’s a big number, but traders seemed to welcome the spend given Alphabet’s clear path to monetizing AI — especially with a $155 billion backlog in Google Cloud.

Search remains a powerhouse, with $56.56 billion in revenue — up 15% YoY. And while the EU’s $3.45 billion antitrust fine took a bite out of reported income, investors largely shrugged it off.

Traders rewarded the clean beat, strong AI demand, and controlled messaging around spend. Alphabet’s up 45% YTD, and sentiment still looks bullish.

What about Microsoft — strong results, weak reaction?

Microsoft did what it was supposed to: beat across the board. Revenue rose 18% to $77.67 billion, with Azure cloud revenue up 40% — ahead of the 38% Street estimate. EPS came in at $4.13, versus $3.67 expected.

Still, shares slipped slightly post-earnings. One reason: a $3.1 billion hit tied to its OpenAI investment knocked net income. Another: traders may have already priced in the upside. Microsoft stock is up 28% YTD and hit a record high the day before the release.

Azure and broader cloud momentum remain strong, and the company’s Productivity segment — including Office and LinkedIn — also beat. Microsoft reiterated that CapEx will remain elevated into 2026, but the pace of growth will slow. That’s a yellow flag for some, especially with AI spending ramping globally.

What’s priced in — and what’s not

Traders came into Big Tech earnings looking for clean growth, strong AI signals, and disciplined spending. Alphabet delivered and got the reward. Microsoft hit the numbers but didn’t offer fresh upside. Meta? Great revenue, but the tax surprise and rising costs spooked the tape.

The takeaway: strong numbers aren’t enough anymore — it’s all about how clean the story is. Investors want to see AI monetization, not just ambition. Next up, Apple and Amazon — and the bar just got higher.