U.S. megacap tech stocks known as the “Magnificent Seven” got their first earnings results of the season, and the market reaction split sharply. Meta Platforms and Tesla rose in after-hours trading after reporting results, while Microsoft fell.
On Tuesday, Microsoft closed up 0.22% on the New York Stock Exchange, Tesla gained 0.13% and Meta slipped 0.63%. After the earnings releases, the moves reversed. As of 7:58 a.m. in South Korea, Meta was up 8.39% after hours and Tesla was up 1.66%, while Microsoft was down 4.70%.
Meta’s after-hours surge followed results that beat expectations and a strong revenue outlook. Meta said fourth-quarter (October-December) revenue rose 24% from a year earlier to $59.89 billion, topping the LSEG consensus estimate of $58.59 billion.
Earnings per share came to $8.88, above the $8.23 estimate. Advertising revenue, which makes up most of Meta’s sales, rose 24% to $58.137 billion. For the full year, Meta reported revenue of $200.097 billion, up 22%.
Meta also reaffirmed an aggressive investment push in artificial intelligence, supported by steady ad revenue. It projected 2026 capital expenditures of $115 billion to $135 billion, above the market estimate of $110.6 billion.
CEO Mark Zuckerberg said, “In 2025, we delivered strong business performance,” and added that in 2026 the company aims to advance “personalized superintelligence for people around the world.” He said Meta will unveil its latest AI model in the coming months and will keep releasing new models throughout the year.
Microsoft’s results also beat expectations, but after-hours trading reflected concerns about future growth and investment costs. Microsoft said fiscal 2025 second-quarter (October-December 2025) revenue rose 17% from a year earlier to $81.27 billion, above the LSEG estimate of $80.27 billion. EPS was $5.16, well ahead of the $3.92 estimate.
Chief Financial Officer Amy Hood said, “Microsoft Cloud revenue exceeded $50 billion this quarter, reflecting strong demand for our portfolio of services,” adding that revenue, operating income and EPS all beat expectations.
In its intelligent cloud segment, revenue rose 29% to $32.9 billion, topping the StreetAccount analyst estimate of $32.4 billion. Operating income increased 21% to $38.3 billion, and EPS was $4.14, above the $3.97 estimate.
Even so, the stock fell about 5% after hours. The Wall Street Journal reported that investors pointed to data center and other capital spending of $37.5 billion, above market expectations, as a drag on the shares.
Tesla also rose after hours after reporting fourth-quarter 2025 revenue of $24.9 billion and EPS of $0.50. Both topped the LSEG Wall Street consensus of $24.79 billion in revenue and $0.45 in EPS.
Tesla also said it signed an agreement on Jan. 16 to invest $2 billion in Elon Musk’s AI startup, xAI.
“Tesla is building products and services that bring AI to the physical world,” the company said, adding that the xAI investment and term sheet are intended to strengthen Tesla’s ability to develop and deploy AI products and services at scale.
Still, Tesla said revenue fell 3% from a year earlier and EPS declined 17%. Full-year revenue totaled $94.8 billion, down 3%, and automotive revenue was $69.5 billion, down 10%.
* This article has been translated by AI.
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