Here’s a tale of two different giant companies so far this earnings season AI.

meta platform Shares soar after signs AI investments are boosting profits, while Microsoft Shares fell as the company struggled to justify recent spending plans to investors and showed slowing growth in its cloud business.

Funding flows into artificial intelligence and new technologies have main source of controversy On Wall Street, investors are increasingly hoping to see companies reap returns from last year’s massive spending.

Yuan seems Gain investor approval Continue to pour money into artificial intelligence. Social media giant shares surge 8% Issue strong guidance It also stated that it plans to invest US$115 billion to US$135 billion in the field of artificial intelligence this year.

That’s nearly double 2025 spending.

Over the past few quarters, investors have expressed concerns about the company’s ambitious spending. However, the company’s 24% year-over-year revenue growth, driven primarily by online advertising, appeared to ease earlier concerns.

CEO Mark Zuckerberg hinted that the company was developing a range of new products this year and said the investment would support his mission to “build personal superintelligence“.

While investors appear to appreciate Meta’s spending plans, Microsoft’s Share price plummeted 11%.

Growth at the software maker’s Azure cloud business slowed, with growth falling to 39% from 40% in the company’s fiscal first quarter. Investors are watching the space closely as a proxy for gauging enterprise artificial intelligence needs.

Meanwhile, capital expenditures and financial leases surged 66% to $37.5 billion in the quarter, beating the $34.31 billion expected by analysts polled by Visible Alpha as the company supported demand in its cloud and artificial intelligence areas.

The company also said it was grappling with constraints on computing power as demand continues to outpace supply.

Microsoft Chief Financial Officer Amy Hood said that if the company devoted all of its new GPU chips in the first and second quarters to its Azure business, Azure would grow 40%.

Outperforming Big Tech Companies

In stark contrast to the post-earnings announcement, AI-driven initiatives permeated the broader tech sector.

IBM’s artificial intelligence strategy won investors’ confidence, and its stock price rose 8%. Technology and consulting companies Exceeded expectations Software and infrastructure showed strong growth as it built new automation tools and artificial intelligence infrastructure.

analyst Goldman Sachs Growth in software and infrastructure, as well as market share gains in consulting, put the company on a “track to complete long-term growth,” it said.

Meanwhile, IBM’s AI business more than doubled from 2017 to $12.5 billion. $5 billion a year ago. This growth seems to justify the company’s investment.

Analysts at JPMorgan called IBM a “relatively defensive company with increasingly favorable tailwinds in software and artificial intelligence.”

However, ServiceNow shares fell 11% on concerns that artificial intelligence is eating into the broader software industry’s business models, overshadowing the company’s results. Earnings better than expected.

The department has Sold off in recent months There are concerns that new AI tools will worsen demand for their workflows and licenses and undermine long-term revenue models.

During an earnings call with analysts, ServiceNow CEO Bill McDermott defended the company’s business model and recent multibillion-dollar acquisitions, which some investors flagged as signs the company is trying to restart growth.

“Let’s set the record straight with the facts,” he said. Enterprise AI will be the biggest driver of supercycle returns on trillions of dollars in investment in AI infrastructure. “