Why are Meta and Microsoft stock trending after earnings?

Meta and Microsoft both reported earnings and now their stocks are trending in opposite directions. What actually happened?

Both companies reported second-quarter/fiscal Q4 2026 results on Wednesday, July 29, and the market reacted quite differently to each. Microsoft beat expectations, reporting revenue of about $90 billion (versus roughly $87.6 billion expected) and adjusted earnings per share of $4.74 against an expected $4.24, with revenue growth of around 18% year-over-year; the company also cited a gain tied to its investment in AI lab Anthropic. Meta's results were more mixed — while revenue of about $60.8 billion beat estimates and grew 27% year-over-year, the company reported a sharp drop in free cash flow (down roughly 91% year-over-year) as its AI infrastructure spending accelerated, and it narrowed its full-year capital expenditure forecast upward to as much as $145 billion. Broadly, both reports fed into a bigger theme playing out across Big Tech this earnings season: investors increasingly scrutinizing whether massive AI infrastructure spending will actually translate into returns, following a similarly mixed reaction to Alphabet's earnings the week before.