On January 30, Microsoft faced a 6% decline in shares due to disappointing results from its AI investments, while Meta saw a 4% increase after CEO Mark Zuckerberg assured investors of a promising future. Both companies' CEOs discussed artificial intelligence following a significant AI breakthrough from Chinese company DeepSeek.
Meta's strong ad revenue performance has been lauded by analysts, contrasting with Microsoft's Azure cloud business which has shown signs of slowing down. Analyst Raimo Lenschow noted that Azure's expected growth in the second half of the fiscal year did not materialize as anticipated, citing an overemphasis on AI at the expense of core Azure services.
Despite concerns regarding Meta's massive AI investment plans, a 21% revenue increase helped alleviate investor worries. Several analysts lauded Meta's potential benefits from AI, leading to increased price targets by 15 brokerages and a positive market value on Thursday.
Conversely, Microsoft faced a significant market cap drop of around $182 billion, following subdued Azure growth and lowered performance expectations. Analysts expressed disappointment over Microsoft's failure to reaffirm its earlier Azure growth projections and a noticeable decline in momentum, with just a 12% gain compared to its competitors last year.