Microsoft and Meta Report Today as AI Spending Takes Centre Stage

Microsoft and Meta are due to publish their latest financial results after US markets close on Wednesday 29 July, putting the technology industry’s huge spending on artificial intelligence infrastructure under a harsh spotlight.

Neither company had released its results when this article was prepared. That makes the figures currently shaping expectations forecasts, rather than confirmed performance. For Microsoft, the central question is whether Azure can maintain the rapid growth needed to support an increasingly expensive network of AI data centres. For Meta, investors will be watching whether strong advertising revenue can keep offsetting a sharply higher AI investment plan.

Microsoft is scheduled to report fiscal fourth-quarter results and host an earnings-call webcast at 2:30pm Pacific Time. Wall Street’s pre-release consensus calls for revenue of $87.67 billion and earnings per share of $4.24, the latter representing expected year-on-year growth of 16%.

Azure has to justify the outlay

Azure is expected to be the decisive metric in Microsoft’s report. Analysts project growth of 39% to 40%, following 40% growth in the previous quarter. In that March quarter, Microsoft said AI services accounted for about 16 percentage points of Azure’s growth, underlining how closely the cloud platform is now tied to demand for AI computing.

Microsoft’s own guidance for the fiscal fourth quarter put total revenue between $86.7 billion and $87.8 billion, representing growth of 13% to 15%. The company said accelerating commercial growth would be partly offset by its consumer business.

The complication is the cost of supplying that growth. Capital expenditure is expected to exceed $40 billion in the quarter, including roughly $5 billion from higher component pricing and the impact of finance leases. Microsoft has projected around $190 billion in capital expenditure for calendar 2026, while expectations for fiscal 2027 spending sit between $255 billion and $260 billion.

That trajectory is expected to put pressure on profitability. Management had guided for operating margin of roughly 44%, down from 46.3% in the prior quarter. Investors are therefore unlikely to treat a simple earnings beat as enough; they will want evidence that new AI capacity is being used quickly and profitably.

The scale of the physical build-out is considerable. Microsoft announced a multibillion-dollar data-centre campus in Pecos, Texas, while continuing work on its Fairwater AI “superfactory” network linking sites in Wisconsin, Atlanta and the Phoenix area. On Monday, it also announced Project Perception, described as its first custom AI cybersecurity system designed to defend against AI-driven cyber threats.

Microsoft’s previous quarter showed why expectations are high. It reported $82.89 billion in revenue, ahead of the $81.39 billion expected, and adjusted earnings per share of $4.27 against a $4.06 forecast. Microsoft Cloud revenue reached $54.5 billion, up 29% year on year, while paid Copilot seats passed 20 million.

Yet the company’s shares still fell sharply after that report as investors focused on capital expenditure. Since 29 April, Microsoft stock is down 9.88%, according to the figures in the research brief.

Meta faces the same spending test

Meta will release its second-quarter results after the US close, followed by a conference call at 1:30pm Pacific Time. Consensus estimates point to earnings per share of $7.18 on revenue of $60.22 billion. That would put revenue near the upper end of Meta’s own $58 billion to $61 billion guidance range.

The forecast implies roughly 27% year-on-year revenue growth, slower than the 33% growth Meta achieved in the first quarter. Its advertising business was strong last time out: first-quarter ad impressions rose 19%, while average price per ad increased 12%.

But, as with Microsoft, the headline earnings figure may not be the market’s real concern. Meta’s 2026 capital-expenditure guidance stands at $125 billion to $145 billion, raised from its earlier $115 billion to $135 billion range. Meta beat revenue and earnings expectations last quarter, yet its shares still fell 6% to 7% after hours on the capital-spending outlook. The stock is down 10.97% since 29 April.

Investors will also be listening for fresh detail on Meta Compute, the company’s emerging effort to rent out AI data-centre capacity. The New York Times reported that Anthropic proposed a potential arrangement that could be worth up to about $10 billion over two years, though talks were described as early and neither company commented. Meta and Anthropic are direct competitors in AI models, making a supplier relationship between them unusual.

Meta is also involved in rental agreements including a $21 billion deal with CoreWeave and a $27 billion agreement with Nebius, according to the research brief. Chief executive Mark Zuckerberg told shareholders in May that a Meta cloud business is “definitely on the table”.

What to watch after the bell

For Microsoft, investors will look first at Azure’s growth rate, AI demand and any updated view on fiscal 2027 capital expenditure. For Meta, the focus will be on advertising momentum, its 2026 spending range and whether management offers clearer signals on a cloud-computing business.

For ordinary UK users, these results matter because the AI race is moving from software demonstrations to costly infrastructure. Microsoft’s investment underpins services such as Copilot and Microsoft 365, used widely by British consumers and businesses. If the returns from AI spending fail to match expectations, companies may face tougher choices over margins, product pricing and the pace at which new AI tools are rolled out.