šŸš€ Meta Soars 12% After Earnings, Saying Superintelligence is 'In Sight'

Plus, Microsoft jumps 6% after strong Azure Cloud growth...

BIG TECH EARNINGS
šŸš€ Meta and Microsoft Soar After Earnings

🄳 It’s Big Tech earnings season, so it’s time for a special edition Weekly Buzz to keep you updated on what’s going on with the tech giants!

ā­ļø Apple and Amazon report earnings tomorrow (so I’ll cover those in the regular Sunday edition), but yesterday Meta and Microsoft delivered glowing earnings reports, causing both stocks to fly high this morning. At market open:

🤿 So let’s dive into each and see what’s new…

šŸ’” P.S. Even if you don’t hold any Meta or Microsoft and only hold the S&P 500, 10% of your portfolio is invested in these two stocks based on their weighting in the index!

šŸ“Š Breaking Down Meta’s Earnings

ā­ļø Meta delivered an incredible quarter, with Zuck attributing the growth to Meta AI ā€œunlocking greater efficiency and gains across Meta’s ad system.ā€

  • āœ… Q2 Revenue was $47.5B, up 22% from last year and 6.1% higher than expected

  • āœ… Earnings per Share was $7.14, 21% higher than expected

  • āœ… Daily Active Users grew to 3.48B, 1.4% higher than last quarter

šŸŽÆ For Q3, Meta projected revenue of $47.5 to $50.5 billion, well ahead of Wall Street estimates of $46.14 billion.

šŸ¤– Increased AI Spending

šŸ¤‘ A common theme across Meta and Microsoft was rising spend on AI… like, a LOT of spending…

🤯 While Meta previously estimated Capex spending between $64B and $72B, it has raised the lower limit to $66B. For context, Meta’s Capex in 2021 (pre-AI mania) was only $19.2B.

šŸ™ This is a great sign for Nvidia ($NVDA), which relies on the tech giants to keep spending more and more on their expensive GPUs that train the AI models.

šŸ§‘ā€šŸ’» AI Talent Wars

šŸ¤ But Meta isn’t just spending big dollars on GPUs, it’s shelling out lots of cash to acquire key talent.

šŸ“ˆ Meta said directly that ā€˜compensation related to hiring will be the second-largest driver of growth’ and expects to spend much more in 2026 than in 2025.

šŸ’° Meta has been making big moves to acquire top talent, offering $100M bonuses to OpenAI employees to recruit them, leading to tons of memes joking that AI researchers are getting ā€˜traded’ like pro athletes.

✨ Some of the most notable this month:

  • Alexandr Wang, the CEO of the start-up ScaleAI, joins Meta as Chief AI Officer after its $14.3B investment in Scale

  • Ruoming Pang, who ran Apple’s AI models team, got poached for $200M

  • Shengjia Zhao, the co-creator of ChatGPT and former lead scientist, was poached to join Meta as chief scientist for Superintelligence Labs

  • Jiahui Yu — co-creator of o3, o4-mini, GPT-4.1 and GPT-4o. Previously led the perception team at OpenAI and co-led multimodal at Gemini

And many more…

šŸ€ So why is Meta doing this? Well the billions being spent on AI GPUs is only as good as the AI researchers you have training the models. With one expert saying that Meta is essentially ā€˜hunting for the AI LeBron James’, estimating that fewer than 1,000 people worldwide can build frontier AI models.

😤 This strategy has ruffled some feathers among competitors who claim that Meta is essentially doing this cause they’re falling behind:

ā

ā€œMeta right now are not at the frontier… t's probably rational what they're doing from their perspective because they're behind and they need to do somethingā€

Demis Hassabis, CEO of Google DeepMind

Sam Altman even called the strategy ā€˜crazy’, saying:

ā

"The degree to which they're focusing on money and not the work and not the mission, I don't think that's going to set up a great culture."

Sam Altman, CEO of OpenAI

🧠 The Era of Personal SuperIntelligence

So what’s all this spending and hiring for? The quest for SuperIntelligence.

While Meta’s AI has already driven efficiency in its advertising, Zuck forsees a world of Personal SuperIntelligence for all, saying:

ā

ā€œAs the pace of AI progress accelerates, developing superintelligence is coming into sight. I believe this will be the beginning of a new era for humanity, and I am fully committed to doing what it takes for Meta to lead the way. ā€œ

🧠 SuperIntelligence refers to an AI that surpasses human cognitive abilities in practically all domains and is essentially what all the top AI firms (Google, OpenAI, etc.) are fighting to build first.

šŸ’Ž All this new talent will be part of an elite unit in Meta known as ā€˜Meta Superintelligence Labs (MSL)’.

šŸŒŽ Zuck believes Meta is ā€œuniquely positioned to deliver superintelligence to the worldā€. To hear about superintelligence from Zuck himself, watch this 1 min reel where he explains the plan.

A few of the most notable things he says:

  • šŸ‘€ ā€œOver the past few months, we’ve begun to see glimpses of AI systems improving themselves.ā€

  • šŸ† ā€œI think a more meaningful impact is everyone having a personal superintelligence that helps you achieve your goals, create what you want to see in the world, be a better friend, and grow to become the person you aspire to be.ā€

  • 😰 ā€œThis vision is different than others in the industry who want to direct the AI at automating all the valuable work.ā€

  • šŸ˜Ž ā€œI think that personal devices like glasses that can see what we see, hear what we hear, and interact with us throughout the day, are going to become our main computing devices.ā€

šŸ’” My Quick Thoughts

šŸ˜€ Including my S&P 500 exposure, I have about 5.5% of my portfolio in Meta, so with the stock flying high today, I’m quite a happy investor.

Meta has delivered consistently strong performance, and I think the moves they’re making to acquire top talent are the right ones in the AI race, so I plan to continue holding the stock!

 šŸŽÆ Analyst Thoughts

Overall, analysts were excited about the results, with one calling it a ā€˜Massive Quarter’.

Tech analyst Dan Ives called it a ā€˜night to remember’, saying:

ā

"We have been talking about the AI Revolution for years but tonight was a night the tech world and the Street will remember for a long time, the jaw dropping numbers from Microsoft and Meta speaks to the AI Revolution hitting its next stage of hyper growth.ā€

And speaking of Microsoft, let’s turn our attention now to their earnings… but first, a quick word from today’s sponsor, BMO ETFs!

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BIG TECH EARNINGS
šŸ“ˆ Microsoft Jumps 6% After Strong AI-Driven Azure Cloud Growth

Note Microsoft has a fiscal year end in June so April-June is its ā€˜Q4 2025’

Like Meta, Microsoft did not disappoint, delivering stellar numbers across the board:

  • āœ… Revenue was $76.4B, up 18% from last year and 3.6% better than analysts expected

  • āœ… Earnings per Share was $3.65, 8.3% better than expected

šŸŽÆ Microsoft also set high expectations to next quarter, estimating $74.7B to $75.8B, well above analyst expectations of $74.1B.

ā˜ļø Growth from the Cloud

šŸš€ Microsoft’s biggest growth driver was its AI-driven ā€˜Intelligent Cloud’ revenues (currently 39% of total revenues), growing 26% from last year, which are mostly from Microsoft Azure.

šŸ’” As a refresher, Microsoft Azure is similar to Google Cloud or Amazon Web Services, which essentially power most of the software on the internet. With cloud services, companies can run apps, store and analyze data, and train AI models without managing physical servers.

🌼 For example, Blossom is run on AWS, so we pay Amazon ~$20,000 per month for all our Cloud services costs. All the new AI tools and apps are leveraging these cloud services in some way (hence the massive growth across Amazon, Google, and Microsoft’s cloud revenues).

šŸ¤– Even OpenAI (which runs ChatGPT) runs most of its workloads (including training GPT models) on Microsoft Azure’s AI supercomputing infrastructure (like NVIDIA GPUs hosted on Azure) due to a deal in 2023 (which came alongside a $10B investment).

šŸ¤– Increased AI Spending

To power the growth in Azure, Microsoft has been significantly ramping up its AI spending, estimating $30B for next quarter, 50% higher than last year and nearly triple what it was 2 years ago.

Looking at the chart, it’s pretty wild to see just how much this spending has exploded in the last few years (which again, is very good news for Nvidia 🤣).

šŸ§‘ā€šŸ’» Co-Pilot Driving Higher Revenue per User

Microsoft’s AI spending isn’t just benefiting its cloud revenues, the company also pointed to the higher adoption of Microsoft 365’s Copilot (which helps developers be more productive using AI) - driving higher revenue per user.

This drove a 21% year-over-year increase in revenue from Microsoft’s 365 consumer products, which for the past 7 quarters had never topped 10% growth.

šŸ¤‘ Microsoft Joins the $4T Club

As a result of the incredible earnings, Microsoft has officially joined Nvidia in the $4T club - soaring to a new all-time-high. But despite the massive growth, Microsoft’s CEO beleive the best is yet to come:

ā

"Cloud and AI is the driving force of business transformation across every industry and sector. We're innovating across the tech stack to help customers adapt and grow in this new eraā€

Satya Nadella, CEO of Microsoft

šŸ’” My Thoughts

Like Meta, I am also a shareholder of Microsoft, with the stock making up 6.6% of my portfolio (including my holdings in the S&P 500), so with the gains from Meta and Microsoft, today was a great day for my portfolio!

Overall, the biggest question going into Big Tech earnings season was ā€˜are the massive AI investments paying off,’ and with the growth numbers delivered by Meta and Microsoft, for now at least the answer seems to be yes.

I’ll save some of my thoughts about the market overall and where this week leaves us for Sunday’s Weekly Buzz (featuring Amazon and Apple’s earnings) to make sure I can give a full picture, but for now I hope you enjoyed my earnings recap!

šŸ‘‹ P.S. For those who are new to the Buzz my name is Max and I’m the author of the newsletter + the CEO of Blossom! Feel free to check out my portfolio and trades on Blossom or follow me on Instagram where I post market news recap videos!

UPCOMING EVENTS
🤩 Join us at the Toronto MoneyShow on Sept 12-13!

šŸ˜Ž For folks in Toronto, 1 week before our big investor conference at the Rogers Centre, there’s another investing conference in town!

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🌼 Tim from the Blossom team will also be speaking in a session on ā€œThe Rise of the Finfluencer: How Content Creators and Online Communities are Reshaping Investingā€ alongside a ton of other incredible speakers.

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