Microsoft showed the revenue. Meta showed the burn.
The two hyperscalers reported on the same afternoon, but their numbers told different stories about how quickly AI infrastructure can turn into durable economics.
What happened
Microsoft reported $90.0 billion in quarterly revenue, up 18% year over year, and $35.8 billion in net income, up 31%. Azure and other cloud-services revenue grew 43%, and Microsoft said annual Azure revenue exceeded $100 billion for the first time. Axios reported that Microsoft's quarterly capital expenditures rose 70% to $41 billion. Meta reported $60.8 billion in revenue, up 28%, while costs and expenses rose 55% to $42.0 billion. Meta's net income fell 14% to $15.8 billion, free cash flow was $784 million, and quarterly capital expenditures including finance-lease principal were $31.1 billion. Meta narrowed its full-year capital-spending range to $130 billion to $145 billion by raising the low end.
Why it matters
The spending race is no longer one undifferentiated AI-capex story. Microsoft paired a large infrastructure bill with accelerating cloud revenue and higher profit; Meta paired strong revenue growth with faster expense growth, lower profit, and little free cash flow. The pressure point is conversion: investors now have public evidence that scale alone does not determine how quickly AI investment reaches revenue, margin, or cash generation.
What to watch
Microsoft's forecast for more than $50 billion of current-quarter capital spending, the share of that spend tied to short-lived GPUs and CPUs, Meta's third-quarter revenue range of $61 billion to $64 billion, Meta's post-layoff cost base, and whether either company discloses product-level returns rather than broad AI attribution.
The caveat
This is not a clean head-to-head comparison. Microsoft and Meta have different businesses, accounting mixes, customer bases, and investment cycles. Meta's quarter also included $2.4 billion in legal charges and $1.18 billion in severance expenses, while Microsoft's GAAP income included investment effects. One quarter cannot establish the lifetime return on either company's infrastructure.