Microsoft, Meta Surge 18%, 22% on AI-Driven Growth

In the second quarter of 2025, both Microsoft and Meta reported financial performances that exceeded market expectations. While their business paths differ—Meta focuses on social media advertising and Microsoft on enterprise-level cloud services—they share a common driver: the deep application and commercialization of AI technology.

Microsoft's revenue for the second quarter reached 764.4 billion dollars, an 18% year-over-year increase, marking the fastest growth rate in nearly three years. Net profit stood at 272.3 billion dollars, a 24% increase from the previous year. Meta's revenue hit 475.2 billion dollars, a 22% year-over-year increase, surpassing analyst predictions of 447.1 billion dollars. Net profit grew by 36% to 183.4 billion dollars, with an operating profit margin of 43%, demonstrating strong profitability.

AI technology has been the core driver behind this growth. Microsoft emphasized that AI has propelled breakthroughs across multiple business areas. Meta highlighted that AI has significantly enhanced its core advertising business. Both companies are increasing their investments in AI. Meta expects capital expenditures for 2025 to range from 660 billion to 720 billion dollars and plans to invest thousands of billions of dollars in building large-scale data centers to support its "super-intelligent" vision. Microsoft previously announced an 800 billion dollar investment in AI data centers for 2025, with capital expenditures for the second quarter increasing by 27% to 242 billion dollars.

Microsoft's Intelligent Cloud division, which includes Azure, generated 298.8 billion dollars in revenue, a 26% increase from the previous year. Azure cloud services saw a 39% year-over-year revenue increase, the highest in two and a half years. For the 2025 fiscal year, Azure and other cloud services revenue exceeded 750 billion dollars, a 34% year-over-year increase. Microsoft's CEO highlighted that rapid AI innovation and widespread application are driving breakthroughs across multiple business areas. The company's AI-related business has an annualized revenue run rate of 130 billion dollars, a 175% year-over-year increase, making it the fastest-growing segment.

Meta's advertising revenue reached 465.6 billion dollars, accounting for 98% of total revenue and a 21% year-over-year increase. This growth is attributed to Meta's AI-driven advertising recommendation system, which has improved the efficiency and revenue of social media advertising. Meta's CEO noted that AI has enhanced the efficiency and revenue of its entire advertising system, increasing ad conversion rates by approximately 5% on Instagram and 3% on Facebook. AI has also improved the ability to show users content they are interested in, increasing usage time by 5% on Facebook and 6% on Instagram.

Both companies have optimistic growth expectations for the future. Meta anticipates third-quarter revenue between 475 billion and 505 billion dollars, significantly higher than market predictions of 462 billion dollars. Microsoft expects double-digit revenue growth for the 2026 fiscal year, with Azure revenue projected to increase by 37% year-over-year.

Currently, AI's contribution to the companies' performance is still in its early stages. Tech companies continue to invest in AI infrastructure and talent, competing for future technological dominance. Microsoft recently announced plans to lay off approximately 9,000 employees, focusing resources on core businesses and high-potential areas, including AI. Meta has aggressively recruited top talent, including former OpenAI researchers and industry leaders, to build a team focused on AI development.

Meta's investment in AI infrastructure is also substantial. The company plans to invest thousands of billions of dollars in building multiple large-scale data centers across the United States, with one facility, Hyperion, supporting up to 50 billion watts of computing power. This investment reflects Meta's aggressive prediction of future AI computing needs. Meta's capital expenditures for 2025 are expected to range from 660 billion to 720 billion dollars, with total expenditures between 1140 billion and 1180 billion dollars. The company anticipates significant growth in capital expenditures in 2026 to meet AI and business operation demands.

Microsoft's investment in AI infrastructure is equally impressive. The company plans to invest 800 billion dollars in AI data centers by 2025, adding over 20 billion watts of data center capacity in the past year. Microsoft operates over 400 data centers in 70 regions globally, the largest scale among cloud service providers. The company's total capital expenditure for the second quarter was 242 billion dollars, a 27% year-over-year increase. Microsoft's management emphasized that the company's capital expenditures are aligned with actual demand and that the supply-demand imbalance may persist until the end of the year. The company's current strategy focuses on expanding market share rather than optimizing capital expenditures.

Both companies are making unprecedented investments in AI, reflecting a broader trend among U.S. tech companies. Long-term, investments in infrastructure and talent will determine their competitive positions in the AI era. The company that secures stronger computing power, superior talent, and a more comprehensive ecosystem will likely dominate future AI applications.