Remember when everyone was calling AI a bubble? Yeah, about that…
Meta and Microsoft just served up earnings reports that basically said “hold my beer” to all the AI skeptics. These weren’t just good numbers – they were the kind of results that make you wonder if you’ve been thinking too small about this whole AI thing.
Meta’s Victory Lap
Let’s start with Zuckerberg’s crew. Meta just posted numbers that would make a startup founder weep with joy:
- Revenue up 22% (their best growth in over a year)
- Ad revenue jumped 21% (also the best in a year)
- Operating margins expanded by 500 basis points
- Earnings per share rocketed nearly 40%
For a company already worth $1.3 trillion, these aren’t just good numbers – they’re “how is this even possible” numbers. And the secret sauce? AI is basically running the show now.
Meta’s AI recommendation engine is filling most of the content you see on Facebook and Instagram. The result? People are spending 5% more time on Facebook and 6% more on Instagram. That’s huge when you’re in the attention business.
But here’s the kicker – their AI tools are making ads work better too. Facebook ad conversion rates rose 3%, Instagram’s jumped 5%. In digital advertising, that’s like finding a money printer in your basement.
Microsoft’s Monster Quarter
Not to be outdone, Microsoft showed up with their own flex:
- Revenue up 17% (fastest growth in over a year)
- Azure cloud revenues surged 39% (best since mid-2022)
- Operating margins rose 200 basis points
- EPS soared 24%
Microsoft Fabric (their AI data platform) grew 55% and is now their fastest-growing database product ever. GitHub Copilot Enterprise users grew 75% in just one quarter. Over 800 million people now use a Microsoft AI product monthly. That’s not a typo – 800 million.
The Real Plot Twist
Here’s what should really get your attention: both companies achieved these insane growth numbers without hiring more people. That’s the AI efficiency dividend in action – more revenue, same headcount, fatter margins.
But wait, there’s more. Both companies just told Wall Street they’re planning to spend about 25% more on AI infrastructure than expected. Meta’s talking about $100+ billion in 2026. Microsoft wants $30 billion next quarter alone.
Translation: the picks-and-shovels companies (think Nvidia, Broadcom, Arista Networks) are about to get a massive windfall. When the biggest tech companies on Earth decide to spend like drunken sailors on AI infrastructure, somebody’s got to build all that stuff.
The Bottom Line
This isn’t hype anymore – it’s results. Meta and Microsoft aren’t trading on promises; they’re delivering real growth and profits right now. And they’re just getting started.
The AI boom isn’t slowing down – it’s hitting the afterburners. If you’ve been sitting on the sidelines waiting for a “better entry point,” these earnings just told you that train might have already left the station.
Sometimes the best investment strategy is the simplest one: when the smartest companies on Earth are going all-in on something, maybe it’s time to pay attention.