Market reactions to big-tech earnings diverged sharply, signaling investors
scrutiny of AI-driven spending. Meta fell as much as 8% in after-hours trade
after issuing disappointing revenue guidance and reporting its weakest free cash
flow in years, a market read as evidence of rising AI-related costs. Microsoft
jumped about 16% post-earnings, adding roughly $450bn of market value, after
reporting the fastest cloud growth in four years and saying it will control
incremental capital expenditure this year. Amazon rallied about 15% after its
cloud revenue posted a four-year high, easing concerns about returns on large AI
investments. Explosive Options founder and chief options analyst Bob Long said
investors will eventually tire of hyperscalers’ endless spending, so restraint
being rewarded is unsurprising. Global AI supply-chain names and firms that
provide or adopt AI appear to be back in favor.
