Tech Companies Are Still Spending Heavily on AI. Investors Want to See More Than Big Numbers.

"Meta's AI spending far exceeded Wall Street's expectations, but so did top- and bottom-line growth, which investors attributed to AI-driven improvements in its core advertising business. Ad revenue grew 24% in the fourth quarter, driven by an 18% increase in impressions and a 6% increase in average prices. Meta forecast revenue would grow even faster in the current quarter-up to 33.5%, its fastest rate since 2021, when the company took in half the revenue it does today."

"Microsoft ( MSFT) stock, on the other hand, plummeted Thursday, as investors focused on disappointing growth in what Morgan Stanley analysts called "key indicators of GenAI fitness." Microsoft's Azure cloud computing platform grew 38% in constant currency last quarter, beating official estimates by one percentage point but falling just short of Wall Street's expectations. Microsoft 365 revenue growth held steady in the mid-teens, disappointing investors hoping to see benefits from the rollout of AI Copilot."

Meta Platforms reported accelerating revenue tied to significant artificial intelligence investments. Capital expenditures rose 50% in Q4 2025 and are expected to increase by more than 90% this year, including spending on data center hardware. Ad revenue grew 24% in Q4, driven by an 18% rise in impressions and a 6% increase in average prices. Meta forecast revenue growth up to 33.5% in the current quarter, its fastest rate since 2021. By contrast, Microsoft shares fell after Azure growth of 38% slightly missed expectations and Microsoft 365 growth remained in the mid-teens despite a 66% rise in capex.

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