Meta Misses Earnings Despite Ad Growth; Microsoft Beats Estimates with Azure Milestone
On July 29, 2026, Meta (NASDAQ: META) and Microsoft (NASDAQ: MSFT) both reported earnings. While Meta missed Wall Street's EPS estimates due to rising AI infrastructure costs and a significant legal charge, it still saw strong ad revenue growth of 27%. In contrast, Microsoft exceeded expectations with an impressive Azure segment that crossed $100 billion in annual revenue for the first time. Microsoft’s Intelligent Cloud division grew by 32%, driven largely by its Azure cloud service. The company also reported a robust commercial backlog of $678 billion—up 84% year over year—which reflects strong contracted demand, particularly from AI-related services like Anthropic and Microsoft Copilot. Meta, on the other hand, is still in an investment phase with no comparable contracted revenue metric to match. Meta’s CEO Mark Zuckerberg emphasized long-term AI investments but noted that enterprise opportunities remain theoretical at this stage. Meanwhile, Satya Nadella highlighted tangible results from Microsoft's cloud operations. The divergent outcomes have led Wall Street analysts to view the two companies differently in terms of their current financial health and future potential.
Topics: AI spending Earnings reports Meta Microsoft Wall Street reaction