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Big tech ETFs jumped on Tuesday after Microsoft Corp. (MSFT) and Meta Platforms Inc. (META) delivered strong earnings and reiterated their bullish outlooks for artificial intelligence.
Big Tech Earnings
Microsoft reported fiscal third-quarter earnings per share of $3.46, beating analyst estimates of $3.21. Revenue came in at $70.1 billion, ahead of the expected $68.5 billion. Growth was broad-based, with total sales rising 15% year over year on a constant currency basis.
The company’s cloud and AI businesses stood out. Azure revenue surged 35%, up from 31% in the prior quarter, with AI accounting for 16 percentage points of that growth. Demand is running so hot that Microsoft now expects to face AI capacity constraints beyond June, according to CFO Amy Hood.
Meta also topped expectations, reporting first-quarter EPS of $6.43 versus estimates of $5.25 and revenue of $42.3 billion versus $41.4 billion expected. That marks a 19% increase in sales year over year on a constant currency basis.
CEO Mark Zuckerberg said nearly a billion people now use Meta AI across the company’s suite of apps. “Our focus for this year is deepening the experience and making Meta AI the leading personal AI,” he said.
Meta lifted its full-year capital expenditures guidance to a midpoint of $68 billion, up from $62.5 billion previously, highlighting the scale of its AI infrastructure investments. The company also reassured investors by guiding second-quarter revenue in line with expectations, easing concerns that President Donald Trump’s escalating trade war might dampen growth.
NVDA, QQQ Boosted
Together, Microsoft and Meta’s strong results and AI-fueled commentary sparked gains across the broader tech landscape. Chipmaker Nvidia Corp. (NVDA), which benefits from rising AI infrastructure demand, was among the notable winners.
The Invesco QQQ Trust (QQQ), which counts Microsoft (8.1% weighting), Nvidia (7.4%) and Meta (3.3%) among its top holdings, climbed about 2% as of midday Tuesday. The ETF has rallied 16.5% since its April lows and is now just 10% below its all-time highs set earlier this year.
Apple Inc. (AAPL) (8.9% of QQQ) and Amazon.com Inc. (5.4%) are set to report their earnings after the bell today, potentially adding more fuel to the tech rally.