"The post-earnings reaction to the Fab Four shows the results were largely expected by investors. Inline guidance from both Meta Platforms and Amazon is not going to impress the Street when you have increasingly higher CapEx budgets, so a post-earnings sell-off for inline guidance is an easy explanation."
"Alphabet put up $5.11 per share against $2.62 consensus, with revenue up 22% to $109.9 billion and Google Cloud revenue surging 63% to $20 billion after Alphabet committed up to $185 billion to its AI capital spending program."
"Meta Platforms dropped almost 6% in initial postmarket action despite easily topping consensus earnings and revenue rising more than 33% YoY. The flashpoint was the upward revision: management raised full-year 2026 CapEx guidance to $125 billion to $145 billion."
Four major tech companies reported earnings, with all beating expectations but only one stock seeing a rally. Nathan Peterson noted that the market's reaction reflects investor expectations. Capital expenditures are rising, impacting investor sentiment. Alphabet's strong revenue growth and commitment to AI spending led to a stock increase, while Meta's raised CapEx guidance caused a significant drop despite strong earnings. Amazon and Microsoft also reported strong results but faced scrutiny over their spending plans, indicating a cautious outlook for the sector.
Read at 24/7 Wall St.
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