Shares of Meta Platforms and Microsoft experienced divergent performances following their recent quarterly results, while Alphabet showed gains. At 3pm in New York on Thursday (Friday AEDT), Meta was down 11.5 per cent, while Microsoft had slid 3.3 per cent. Alphabet, which also reported after Wednesday’s closing bell, was 3.4 per cent higher.
Despite the mixed market reaction, Wedbush Securities analyst Dan Ives remains optimistic. He highlighted the robust cloud numbers from Microsoft and Alphabet, along with a significant increase in capital expenditure (cap-ex) into 2026, led by Meta. Microsoft is a multinational technology corporation that develops, licenses, and supports a range of software products, services, and devices. Meta Platforms is a technology conglomerate that focuses on social media, virtual reality, and artificial intelligence.
Ives believes Meta’s increased cap-ex forecast into 2026 is a positive move, not just for Meta but for the broader tech sector, particularly benefiting companies like Nvidia and AMD. According to Ives, an ‘AI Arms Race’ is fuelling the next phase of growth, driven by substantial spending from Big Tech, which is expected to continue through 2026. This surge in investment is accelerating the AI trade faster than anticipated.
Google has increased its cap-ex by around 7 per cent and indicated higher spending growth into 2026, while Microsoft signalled a potential 50 per cent increase in cap-ex next year. Meta is projected to have spending in the 60 per cent range. Ives acknowledges that free cash flow and earnings may be impacted, but emphasises that the long-term focus should be on the ‘Year 3 of an 8-10 year build out of this new economy’.
