BIG TECH EARNINGS
🚀 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!

⭐️ 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:

• Meta ($META) jumped 12%

• Microsoft ($MSFT) jumped 6%, crossing a $4T market cap

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

📊 Breaking Down Meta’s Earnings

⭐️ Meta delivered an incredible quarter, with Zuck attributing the growth to Meta AI “unlocking greater efficiency and gains across Meta’s ad system.”

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

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

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

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

🤖 Increased AI Spending

🤑 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.

🙏 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.

🧑‍💻 AI Talent Wars

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

📈 Meta said directly that ‘compensation related to hiring will be the second-largest driver of growth’ and expects to spend much more in 2026 than in 2025.

💰 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 ‘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…

🏀 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 ‘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:

Sam Altman even called the strategy ‘crazy’, saying:

🧠 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:

🧠 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.

💎 All this new talent will be part of an elite unit in Meta known as ‘Meta Superintelligence Labs (MSL)’.

🌎 Zuck believes Meta is “uniquely positioned to deliver superintelligence to the world”. 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:

• 👀 “Over the past few months, we’ve begun to see glimpses of AI systems improving themselves.”

• 🏆 “I 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.”

• 😰 “This vision is different than others in the industry who want to direct the AI at automating all the valuable work.”

• 😎 “I 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.”

💡 My Quick Thoughts

😀 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!

 🎯 Analyst Thoughts

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

Tech analyst Dan Ives called it a ‘night to remember’, saying:

And speaking of Microsoft, let’s turn our attention now to their earnings… but first, a quick note about some of the exciting events we have coming to New York and LA!

UPCOMING EVENTS
😍 Blossom is Coming to LA!

🤩 Exciting news! We’ve launched tickets for our Blossom event in LA on Oct 15, which will feature food, drinks, meeting fellow investors, and panel discussions with some of the top investing creators in the US!

🗽 We’re also stopping by New York on Oct 3 for an event at the Nasdaq Market Centre. Tickets are going fast for both events, so make sure to grab your ticket if you want to come 😊

BIG TECH EARNINGS
📈 Microsoft Jumps 6% After Strong AI-Driven Azure Cloud Growth

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

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

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

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

☁️ Growth from the Cloud

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

💡 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).

🤖 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).

🤖 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 🤣).

🧑‍💻 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.

🤑 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:

💡 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 ‘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!

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