Dow Jones Futures: Market Rally Falls As Fed, Microsoft, Meta Loom; 5 Earnings Movers Late
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19 minutes ago
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Mark Zuckerberg Is Wooing Wall Street With AI Again. Is It Too Late to Buy META Stock?
Meta Platforms (META) released its Q2 2025 earnings yesterday, July 30, and the stock is trading sharply higher today, as the company not only reported better-than-expected numbers for the June quarter, but also provided an upbeat outlook for the current quarter. In this article, we'll discuss whether Meta stock remains a buy despite today's rise, as CEO Mark Zuckerberg once again showed off the company's artificial intelligence (AI) strategy to the markets. Meta Beats Q2 Earnings Meta reported revenues of $47.52 billion in Q2, up 22% year-over-year and well ahead of the Street estimate of $44.8 billion, as well as the $42.5 billion to $45.5 billion that the company guided for. The beat on the bottom line was even more spectacular. Meta's Q2 earnings per share of $7.14, up 38% year over year, dwarfed the $5.92 that analysts were modeling. More News from Barchart Morgan Stanley Says Nvidia Has 'Exceptional' Strength. Should You Buy NVDA Stock Here? Dear MicroStrategy Stock Fans, Mark Your Calendars for July 31 2 Growth Stocks Wall Street Predicts Will Soar 74% to 159% Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! Meta guided for Q3 sales between $47.5 billion and $50.5 billion, ahead of the consensus estimate of $46.14 billion. Here are some of the other key takeaways from the report. Hiring Activity Will Lead to Higher Expenses: Meta expects headcount growth in 2025 and 2026 as it continues to add employees in its 'highest priority areas.' The company expects total expenses to grow by between 20% and 24% this year and expects 'meaningful upwards pressure' on 2026 expenses. Meta expects higher depreciation expense on growing capex to be the biggest driver of expense growth, followed by employee compensation. Capex Spending to Increase in 2026: During the Q2 earnings call, Meta CFO Susan Li talked about ramping up AI investments in 2026. 'We continue to see very compelling returns from our AI capacity investments in our core ads and organic engagement initiatives, and expect to continue investing significantly there in 2026.' Metaverse Losses Balloon While Sales Stay Tepid: Meta's Reality Labs segment, which is building the metaverse, reported revenues of only $370 million in Q2, which trailed Street estimates. While that segment's operating loss rose slightly compared to the corresponding period last year to $4.53 billion, it was narrower than expected. Its quarterly operating losses have been in the ballpark of $4 billion for the last three years, and the collective losses since late 2020 have accumulated to a whopping $70 billion. While the company's Quest headsets failed to take off, Meta said that sales of Ray-Ban Meta smart glasses more than tripled in the first half of this year. Zuckerberg, meanwhile, remains optimistic on that segment and said that AI will only accelerate things. WhatsApp Monetization: Meta is rolling out ads in Status and Channels. The company expects the ads in WhatsApp status to have a lower average selling price than Facebook and Instagram, but monetizing the WhatsApp user base is one of the major opportunities for Meta in the medium to long term. Zuckerberg Woos Markets with AI Strategy During Meta's Q1 earnings call, Zuckerberg shattered the perception that AI is a bubble. The Q2 call was a step forward in that direction as the Meta CEO talked at length about how the company is taking its AI strategy forward, and towards the beginning of the call itself claimed that 'superintelligence' – or AI surpassing human intelligence – is now in sight.' According to him, AI glasses will help 'integrate superintelligence into our day-to-day lives.' Zuckerberg also put to rest concerns over AI monetization and said that the strong advertising growth in the quarter, which was well ahead of analysts' estimates, was largely due to 'AI unlocking greater efficiency and gains across our ads system.' Specifically, he said that the AI-powered recommendation model helped drive nearly 5% more ad conversions on Instagram while the corresponding number for Facebook was 3%. Similarly, the model helped drive an increase in time spent on Instagram and Facebook by 6% and 5%, respectively. Zuckerberg reiterated his previous view and said, businesses 'will soon have a business AI just like they have an email address, social media account, and website.' Meta Stock Forecast: Is It Too Late to Buy Now? Meta has risen to an all-time high today and is on the cusp of becoming a $2 trillion behemoth. Expectedly, sell-side analysts have been raising the stock's target price following the confessional. D.A. Davidson, for instance, raised Meta's target price from $650 to $825 while Morgan Stanley raised its from $750 to $850. I believe it's still not too late to buy Meta stock, especially for patient investors, and I still see it as among the best AI plays out there. While the stock's valuations are trending above historical averages, the Facebook parent has earned the right to premium valuations with its aggressive yet successful and efficient AI strategy. On the date of publication, Mohit Oberoi had a position in: META. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
19 minutes ago
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Microsoft Hits $4 Trillion Market Cap After Earnings Beat
(Bloomberg) -- Microsoft Corp. has become the second company in the world to reach a $4 trillion market capitalization after reporting quarterly earnings that beat Wall Street's expectations, sending the stock soaring in premarket Thursday. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival We Should All Be Biking Along the Beach Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus Shares of the technology behemoth jumped as much as 8.2% in early trading in New York, pushing its market value to $4.1 trillion. Nvidia Corp. became the first company to hit the milestone earlier this month. 'Microsoft is getting the recognition that it deserves because it is the operating system for business. All of us run our businesses on Microsoft with Word, with Outlook, with Excel,' said Kim Forrest, chief investment officer at Bokeh Capital Partners LLC. 'This quarter's results point to an even better position for Microsoft because, like Nvidia, there appear to be no substitutes.' The company's latest results confirmed that it's a leader in the artificial intelligence boom that's lifted megacap tech stocks, and the broader market, for the last few years. Microsoft reported better-than-expected growth in its cloud business, and its closely-watched Azure cloud-computing unit posted a 39% rise in sales, handily beating the 34% analysts expected. On a call with analysts, Chief Financial Officer Amy Hood said Microsoft expects fiscal first quarter capital expenditures at more than $30 billion, and full year revenue growth in the double digits. In addition, Azure is expected to post a 37% growth rate in the first quarter, above forecasts. Investors are welcoming outsized spending on AI infrastructure. Meta Platforms Inc. also lifted the low end of its forecast for 2025 capital expenditures and provided an early steer on 2026 spending. Shares in the Facebook-owner rallied as much as 13%, adding more than $223 billion to the social media giant's market cap — if gains hold, this would be its biggest single-day market value addition ever. The stocks are the second and third-best performers among the so-called Magnificent Seven mega tech stocks this year. Since its April 8 trough when President Donald Trump's sweeping tariff threats spurred a broader market selloff, the stocks surged more than 50% and are trading at record highs. This year has marked something of a rebound for Microsoft stock. It had lagged its peers in 2024 and the first quarter of 2025, the only Magnificent Seven stock in the red for that period, as investors grew concerned about its AI position and Azure growth. Wall Street is largely bullish on Microsoft shares, with 68 of the 72 analysts covering the company giving it a buy rating and one giving it a sell, according to data compiled by Bloomberg. (Updates chart and stock moves in second paragraph, adds details in seventh.) Russia Builds a New Web Around Kremlin's Handpicked Super App Burning Man Is Burning Through Cash Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19 minutes ago
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NVDA: Nvidia Smashes New Records as Microsoft, Meta Ramp Up Spending
July 31 - NVIDIA (NVDA, Financial) hits a new all-time high after climbing about 2% on Thursday morning. Investors see its GPUs as the go-to for AI model training. Warning! GuruFocus has detected 5 Warning Signs with NVDA. Microsoft (MSFT, Financial) reinforced that view by reporting fourth-quarter capital expenditures of $24 billion, well above the $21.4 billion analysts expected. Meta Platforms (META, Financial) also boosted its 2025 capex floor to $66 billion-$72 billion from $64 billion-$72 billion, signaling continued AI hardware spending. Those hefty budgets point straight back to NVIDIA's processors, with demand for its H100 and A100 chips surging in cloud data centers. A new European project, Stargate Norway, a partnership of OpenAI, Nscale and Akerplans to deploy 100,000 NVIDIA GPUs in Narvik by end-2026, running AI workloads on renewable energy. Rival chipmakers felt the lift too: Advanced Micro Devices (AMD, Financial) inched up about 2%, while Broadcom (AVGO, Financial) added 1% before the opening bell. With AI investments accelerating, NVIDIA's rally underscores its central role in powering next-gen computing. Based on the one year price targets offered by 53 analysts, the average target price for NVIDIA Corp is $184.95 with a high estimate of $372.87 and a low estimate of $100.00. The average target implies a upside of +3.17% from the current price of $179.27. Based on GuruFocus estimates, the estimated GF Value for NVIDIA Corp in one year is $280.31, suggesting a upside of +56.36% from the current price of $179.27. Gf value is Gurufocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. For deeper insights, visit the forecast page. This article first appeared on GuruFocus.
