Meta Platforms surged 8% after reporting earnings that signaled its aggressive investments in artificial intelligence are beginning to pay off, marking a sharp contrast to the performance of other major tech giants. The rally came amid growing investor scrutiny over whether massive spending on AI and new technology is translating into tangible returns. Meta’s strong results, including 24% year-over-year revenue growth driven by robust online advertising, reassured markets and validated its strategy. The company announced it plans to spend between $115 billion and $135 billion on AI this year—nearly double its 2025 spending—while providing optimistic forward guidance. CEO Mark Zuckerberg emphasized that these investments are central to his vision of building "personal super intelligence," with new products in development across the company’s platforms. The market responded positively, rewarding Meta’s bold commitment despite past concerns about its spending. In stark contrast, Microsoft shares plunged 11% following its earnings report, reflecting investor disappointment over signs of slowing momentum in its core cloud business. The company’s Azure cloud segment saw growth slow to 39% year-over-year, down from 40% in the prior quarter—a small but meaningful dip that raised concerns about the pace of enterprise AI adoption. Worsening the outlook, Microsoft’s capital expenditures and finance leases soared 66% to $37.5 billion, significantly exceeding the $34.31 billion analysts had expected. The spike reflects the company’s ongoing efforts to expand infrastructure to meet rising demand for AI and cloud services. However, the numbers underscore a growing challenge: supply is struggling to keep up with demand. Microsoft’s finance chief, Amy Hood, noted that Azure’s growth could have reached 40% if all newly acquired GPU chips had been deployed in the first half of the year. The divergent reactions highlight a pivotal moment in the tech sector, where investors are no longer simply rewarding big spending on AI. Instead, they are demanding proof of scalable returns and sustainable growth. While Meta appears to be gaining investor confidence by showing that AI investments are driving revenue, Microsoft’s struggles with capacity constraints and slowing cloud growth have triggered a reassessment of its strategy and spending efficiency.