The simple version

Microsoft and Meta both report quarterly results after the market closes today, hours after the Federal Reserve announced its interest rate decision. Microsoft is closing out its 2026 fiscal year, and Meta is reporting the second calendar quarter. Both are spending enormous sums on artificial intelligence.

As with Alphabet last week, which posted a record profit and still saw its stock drop, the headline profit will not be the story. For Microsoft, the number that decides the reaction is the growth rate of its Azure cloud business. For Meta, it is advertising revenue.

Each of those is the receipt that tells investors whether the company's AI spending is turning into revenue fast enough to justify it.

The numbers

• Microsoft and Meta both report after the close today, July 29; Apple and Amazon follow on Thursday (company investor relations calendars)
• Microsoft is reporting its fiscal fourth quarter, which ends in June, while Meta is reporting the second calendar quarter (company filings)
• Azure and other cloud services revenue grew 40% in Microsoft's most recently reported quarter, above the roughly 37% analysts had expected (Microsoft, fiscal third quarter 2026, reported April 29, 2026)
• Microsoft reported $31.9 billion of capital expenditures including finance leases in that quarter, up 49% from a year earlier (Microsoft)
• Microsoft has guided to more than $40 billion of capital spending in the quarter it reports tonight, and roughly $190 billion for calendar 2026, with about $25 billion of the increase attributed to higher component prices (Microsoft, as reported)
• Meta guided to second-quarter revenue of $58 billion to $61 billion, a midpoint of $59.5 billion (Meta, first quarter 2026 release, April 29, 2026)
• Meta raised its full-year 2026 capital expenditure outlook to a range of $125 billion to $145 billion, up from a prior range of $115 billion to $135 billion (Meta)
• Alphabet reported a record $112.1 billion profit last week alongside free cash flow of negative $5.9 billion, its first negative free-cash-flow quarter since going public in 2004; the stock fell as much as 7% and closed down about 6% (Alphabet, Form 8-K; as reported)
• These companies sit inside an AI capital spending wave estimated at roughly $725 billion across four hyperscalers in 2026 by a Financial Times compilation, and about $785 billion across six by Moody's Ratings (Financial Times; Moody's Ratings)

Why one number matters more than profit

Both companies will almost certainly report large profits. That is expected, and expected news is already reflected in the share price, so on its own it moves nothing. The market is asking a narrower question: is the AI spending producing revenue fast enough to justify it?

For Microsoft, Azure is the answer. Azure is the cloud business where other companies rent Microsoft's computing power, including the AI computing Microsoft has spent tens of billions of dollars building. If Azure's growth rate holds up, that is direct evidence the buildout is meeting real demand.

If Azure slows while capital spending climbs toward $190 billion for the year, that is the exact gap that punished Alphabet last week. Alphabet's profit was a record. Its free cash flow went negative because of spending, and the stock fell anyway.

For Meta, the logic runs through advertising instead. Meta does not sell cloud computing, and nearly all of its revenue comes from ads on its apps. Its AI spending is meant to make those ads more effective and keep people using the apps longer.

So ad revenue growth is Meta's receipt. It is the main way the AI investment can show up as money, and the company has told investors it may spend as much as $145 billion this year. Investors want to see the revenue line moving with the spending line.

The Real Cost lens on a night you are already invested in

If you hold a broad stock index fund, tonight is not a spectator event, because you own pieces of both companies whether you follow them or not.

• Microsoft and Meta are among the largest holdings in the S&P 500, so a broad index fund moves with how these two reports land
• Combined with today's Fed decision, this is one of the most concentrated days of market-moving news in the year, and most of it resolves after the market has closed
• None of that is a reason to trade around it. Reacting to after-hours earnings moves is one of the more reliable ways ordinary investors fall behind the index they already own
• It is a reason to understand a swing if you see one tomorrow. If your balance moves, tonight's two reports and today's Fed decision are the likely explanation, and none of it required anything from you

The calm version of tonight is knowing in advance that two of your largest holdings are being graded on one number each, and that the grade is about their spending discipline, not about anything in your control.

What this means

When the numbers land tonight, skip the profit headline and find the one number that matters. For Microsoft it is Azure's growth rate, for Meta it is advertising revenue. Then set that number against what the company spent.

That comparison, revenue growth against capital spending, is the lens the market is applying to every one of these reports this season. Any company making an enormous bet on a new business runs the same race between spending now and earning later, and the market is currently rewarding the ones that can show the earning is keeping up.

What this is NOT

This is not a prediction of Microsoft's or Meta's results, or of how their stocks will react. This is not advice to buy, sell, or hold either company, any index fund, or any security, and it is not a recommendation to trade around earnings.

The guidance and expectation figures here were reported by the companies previously and are expectations, not results. Tonight's actual numbers are not in this article because they have not been released. This is not investment advice of any kind.

Sources

• Microsoft Corporation, investor relations and earnings releases: https://www.microsoft.com/en-us/investor
• Microsoft Corporation, Form 8-K, fiscal third quarter 2026, SEC EDGAR: https://www.sec.gov/Archives/edgar/data/0000789019/000119312526191457/msft-ex99_1.htm
• Meta Platforms, Inc., first quarter 2026 results: https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Reports-First-Quarter-2026-Results/default.aspx
• Alphabet Inc., Form 8-K, second quarter 2026, SEC EDGAR: https://www.sec.gov/Archives/edgar/data/0001652044/000165204426000066/googexhibit991q22026.htm
• Financial Times and Moody's Ratings capital expenditure compilations (as reported)