Shares of Microsoft and Meta are surging after strong earnings reports
Shares of Microsoft Corp (NASDAQ:MSFT) and Meta Platforms Inc (NASDAQ:META) are surging after earnings -- and dragging the broader market higher with them. Strong quarterly results from the two Big Tech giants helped ease investor concerns over a potential slowdown in artificial intelligence (AI) spending, despite ongoing macroeconomic uncertainty. In response, the broader market is soaring.
Microsoft Impresses with Cloud Growth and Bullish Outlook
Microsoft stock is up 8.6% at $429.44 at last glance, after the tech giant posted fiscal third-quarter earnings of $3.46 per share on revenue of $70.07 billion, topping Wall Street estimates of $3.20 per share and $68.38 billion, per LSEG. Revenue rose 13% year-over-year, with Microsoft’s cloud business -- including Azure -- bringing in $26.8 billion, a 21% jump that beat internal forecasts. The company also issued upbeat guidance across all major business units for the current quarter.
In response, MSFT is on track for its best single-day percentage gain since April 9, and is pacing for its third-straight weekly win. The stock is also trading at its highest level since late January and has reclaimed its year-to-date breakeven mark -- now up 2.7% in 2025.
No fewer than 16 analysts hiked their price targets, the highest of which came from Jefferies, to $550. Meanwhile, Oppenheimer assumed coverage on MSFT with a "perform" rating.
Options volume is exploding on Microsoft stock. So far, 377,000 calls and 216,000 puts have traded -- 6 times the average intraday volume. New positions are being opened at the six most active contracts, led by the weekly 5/2 440-strike call.
Meta Stock Jumps as Ad Revenue and AI Spending Surge
Meta Platforms stock is 4.5% higher at $573.51, after the Facebook and Instagram parent reported first-quarter revenue of $42.31 billion, up 16% year-over-year and above expectations. While user growth and ad impressions came in line with forecasts, ad pricing rose 10% from a year earlier -- more than double projections. Meta also raised its full-year capital expenditures to a range of $64 billion to $72 billion, driven largely by increased investment in AI infrastructure.
META opened the session at $592.95 but has since pulled back slightly. The stock is still trading at its highest level since mid-April and is pacing for its third-straight weekly gain, as well as its best single-session percentage gain since April 9. Year-to-date, Meta Platforms stock remains down 2.1%, though it boasts a 30.6% lead over the last 12 months.
At least 14 analysts raised their price targets on META, the highest of which came from Rosenblatt Securities, to $918. However, not all updates were bullish -- Wells Fargo cut its price target to $664 from $752, while four other firms also adjusted to the downside.
Meta Platforms stock is also seeing heavy options activity. More than 349,000 calls and 189,000 puts have crossed the tape -- 3 times the average intraday pace. Traders are opening new positions at the top three most active contracts, with the weekly 5/2 600-strike call drawing the most attention.