U.S. markets rose Thursday morning, lifted by blockbuster earnings from Microsoft (MSFT) and Meta (META) that seemed strong enough to overshadow Wednesday’s unexpected GDP contraction. With Big Tech’s collective market cap nearing $10 trillion, investor sentiment looked ready to ride the rally — if Amazon (AMZN) and Apple (AAPL) can stick the landing after Thursday’s close.
Unsurprisingly, the Nasdaq was leading the charge, up 1.8%. The S&P was up under 0.8%, with the Dow Jones Industrial Average rising 0.3%.
Delivering their latest quarterlies after Wednesday’s bell, Microsoft and Meta both crushed expectations. Microsoft’s Azure cloud revenue surged 33% year-over-year, driving an 18% jump in earnings per share. Meta posted a staggering 89% profit increase on 27% revenue growth.
Microsoft stock was up 9% before the bell Thursday. Shares of Meta added more than 6%.
The underlying strength of both reports has markets betting that Amazon, as another “hyperscaler” helping bigwig enterprise customers get in on the AI revolution, will keep the momentum going. Apple, with its different mix of exposure to consumer spending, tariffs, and trade winds, was down about 1.5%.
Microsoft’s quarter drew gushing praise from analysts both on and off the earnings call, with Wedbush calling it “an Aaron Judge-like performance” (referring to the New York Yankees slugger). Azure beat both the Street and internal targets, with AI workloads accounting for nearly half the cloud platform’s growth.
The company reaffirmed its $80 billion FY25 capital expenditures forecast and said infrastructure investments will continue to rise in FY26 — putting to rest speculation about data center cutbacks. Wedbush raised its price target from $475 to $515.
Meta stock jumped after hours as the company reported EPS of $6.43 on revenue of $42.3 billion, beating estimates on both the top and bottom lines. “While many companies have held back guidance amid tariff uncertainty, META did — a bullish sign,” Zacks strategist Andrew Rocco said. The company’s Q2 revenue forecast of $42.5 to $45.5 billion topped Street estimates, and planned 2025 capital expenditures of $64-$72 billion suggest Meta is betting big on sustained AI demand.
Even after the Senate narrowly rejected a bipartisan push to block Trump’s new tariffs, trade tensions remain unresolved. U.S. Trade Representative Sarah Bianchi Greer said there are “no official talks yet” with China — though smaller deals with other nations may materialize in the coming weeks.
The continuing ambiguity continues to haunt earnings calls and cloud forward guidance, and both Amazon and Apple will likely have to mention the elephant as they report later today.
McDonald’s missed earnings expectations as global sales fell, revenue declined, and U.S. same-store sales lagged, with the company pointing to wary consumers and geopolitical headwinds. Harley-Davidson (HOG), meanwhile, pulled its full-year guidance altogether after international sales tumbled — citing the growing weight of global trade uncertainty.
These warnings reinforce that tariff fears aren’t just weighing on Wall Street — they’re reshaping strategy in C-suites across America.
And it’s not just large caps like McDonald’s feeling the strain. The Russell 2000, a barometer of small-cap performance, is down 13.5% so far this year — by far the hardest hit of the four major indexes. It’s a reminder that smaller companies, lacking the pricing power and global leverage of Big Tech, may be the sheer most vulnerable.
A Wall Street Journal report suggesting Tesla’s (TSLA) board began looking to replace Elon Musk “about a month ago” was later denied by the board. Musk recently announced he’d been spending more time on Tesla, however.
Tesla stock was down about 1.5% premarket.
Airbnb (ABNB), Amgen (AMGN), MercadoLibre (MELI), and Eli Lilly (LLY) will also report on Thursday. Berkshire Hathaway (BRK.A) is set to report Friday.
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