Earnings Showdown: Is Microsoft or Meta More at Risk When July 29 Earnings Drop? - 24/7 Wall St.

What the report says

24/7 Wall St. reported that Microsoft and Meta were heading into their July 29 earnings releases with investor attention focused less on whether they would beat quarterly expectations and more on how each company would frame future artificial intelligence spending. The article, published July 28 by Alex Sirois, said market expectations already implied high odds of earnings beats for both companies, making capital expenditure guidance the likely driver of the stock reaction.

The report contrasted Microsoft’s cloud and enterprise AI position with Meta’s advertising-led business model. It cited Microsoft’s latest quarterly revenue at $82.89 billion, up 18.3%, with Intelligent Cloud revenue rising 30% and Azure up 40%. It also pointed to a $37 billion annual run rate for Microsoft’s AI business and $627 billion in commercial remaining performance obligations. For Meta, 24/7 Wall St. cited revenue of $56.31 billion, up 33.08%, supported by higher ad impressions and ad pricing, while noting that Reality Labs posted a $4.03 billion operating loss.

According to the article, the main risk for Microsoft is whether AI-related spending continues to climb without a matching acceleration in Azure growth, which could pressure free cash flow expectations. For Meta, the report said its high gross margin and lower forward valuation may provide more room for investors to tolerate AI infrastructure spending, though it remains exposed to advertising cycles and ongoing Reality Labs losses.

The author’s stated preference going into the reports was Meta, while acknowledging Microsoft’s large backlog as a defensive advantage. The piece framed the July 29 earnings event as a test of whether Wall Street sees AI investment plans as disciplined growth spending or a risk to future cash generation.