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As the release of earnings reports from leading U.S. technology firms began, Meta and Microsoft announced impressive outcomes that exceeded investor predictions on the 28th (local time). Despite maintaining significant investments in areas connected to artificial intelligence, such as AI agent services and smart glasses, their main source of income remained advertising and cloud-based services.

Meta reported on the 28th that its revenue for the last quarter of the previous year amounted to $59.89 billion. This represents a 24% increase compared to the same period in the prior year, surpassing the market’s prediction of $58.59 billion. Profit per share (EPS) also exceeded expectations, reaching $8.88 versus the projected $8.23.

Advertising and marketing powered by artificial intelligence drove the expansion. Advertising income, which makes up the largest portion, increased by 24% compared to the previous year, reaching $58.137 billion. On the other hand, earnings from Reality Labs—responsible for smart glasses and virtual reality (VR) equipment—decreased by roughly 11.8% to $955 million when measured against the prior year.

Microsoft also reported impressive financial results. The company’s revenue for the same period grew 17% compared to the previous year, reaching $81.3 billion, which exceeded the market prediction of $80.27 billion. Operating profit increased by 21% to $38.3 billion, and earnings per share amounted to $4.14, surpassing the expected figure of $3.97.

The main source of income came from cloud services. Revenue from the Intelligent Cloud rose 29% compared to the previous year, reaching $32.9 billion, which exceeded the market prediction of $32.4 billion. In this category, revenue from the cloud service ‘Azure’ went up 39% during the same timeframe. On the other hand, the Personal Computing segment—covering the Windows operating system and gaming consoles such as Xbox—fell by 3%.

Like last year, significant investments in AI are anticipated to persist this year, leading to additional cost hikes. Meta disclosed that its capital expenditure (CAPEX), including interest expenses, amounted to $22.14 billion in the fourth quarter of the previous year and $72.22 billion on an annual basis. The company forecasted that this year’s CAPEX might increase to as much as $135 billion (around 193.2 trillion South Korean won) throughout the year. Microsoft also stated that its CAPEX jumped 66% compared to the same period last year, reaching $37.5 billion during the October–December timeframe, with further increases in future spending expected.

Stock prices showed different trends. Meta’s shares increased by over 10% during after-hours trading after the earnings report. Microsoft’s stock declined by more than 5% following the results, which was linked to higher expenses and a deceleration in cloud service expansion.