Four of the largest U.S. technology companies—Alphabet, Amazon, Meta, and Microsoft—reported quarterly earnings after the bell, delivering a mixed bag of results that sent stocks moving in diverging directions.
Meta Platforms shares slid after the company raised its spending outlook for the year, reigniting fears that the historic levels of investment it is making to build artificial intelligence models may not pay off. The social media giant's increased capital expenditure plans overshadowed otherwise solid revenue figures.
Microsoft's cloud business, Azure, reported growth that narrowly beat analysts' estimates, but the modest beat disappointed investors who had hoped for a larger upside. The stock edged lower in extended trading as concerns about AI-related cost pressures lingered.
Alphabet and Amazon also posted earnings, with both showing strength in their respective cloud and advertising segments. However, the overall market reaction was muted, as investors weighed the long-term profitability of heavy AI spending against near-term results.
"The market is trying to figure out if these massive AI investments are going to generate returns," said one analyst. "Meta's higher spending forecast spooked people, but Microsoft's cloud numbers show demand is still there."
The four tech giants collectively represent a significant portion of the S&P 500's market cap, making their performance a bellwether for the broader market. Analysts expect continued volatility as companies navigate the balance between innovation and fiscal discipline.