Wall Street investors divide over massive artificial intelligence spending after latest quarterly earnings
Wall Street is rewarding companies that show immediate growth from AI while punishing those that fall short. Meta shares surged as Microsoft fell sharply.
Insights:
This week’s quarterly earnings from major technology firms produced a clear market split as investors displayed a willingness to overlook rising artificial intelligence spending when it fuels strong growth and punished companies that fell short. On Thursday, January 29, 2026, shares of Meta Platforms, Inc. surged more than 9% after reporting strong sales, while Microsoft Corporation shares slumped 10% after its cloud business results and guidance failed to impress investors.
Meta Platforms, Inc.reported that revenue rose 24% in the fourth quarter, the December quarter, and forecast that growth could accelerate by as much as 33% in the current quarter. Chief executive Mark Zuckerberg mark zuckerbergnoted that gains from AI were helping fund the company’s capital spending, which is expected to jump as much as 87% to $135 billion this year. Total expenses at the social media giant are predicted to increase 43% this year to $169 billion as AI improvements bolstered ad targeting within its advertising business.
