Microsoft and Meta spent at the same scale but received opposite reactions. Microsoft and Meta reported after market close last night, both spending unprecedented amounts on AI infrastructure, and the market sent them in opposite directions. Microsoft rose as much as 7% after hours. Meta fell, showing declines between 5% and 11%, depending on when you looked. Same investment story, completely different reception. The pattern had been set a week earlier by Alphabet: revenue up 24% to $119.8 billion, Google Cloud up 82%, yet the stock still fell because its 2026 investment plan soared to $195–205 billion and free cash flow turned negative for the first time since its 2004 IPO. The Magnificent Seven lost roughly $767 billion in market value in a single session on the 23rd. The market had stopped rewarding spending. Microsoft gave it a reason to start again. Revenue: $90.0 billion, up 18%. Operating income: $40.6 billion, up 18%. Diluted EPS: $4.81, up 32%. Azure grew 43% against a consensus of 40% and surpassed $100 billion in annual revenue for the first time. Copilot exceeds 30 million paid seats. Capital expenditures totaled $35.8 billion for the quarter and $115.9 billion for the year, with management guiding over $50 billion for the first quarter and approximately $175 billion each for calendar year 2026 and fiscal year 2027, pledging that free cash flow will remain positive. Meta’s problem wasn’t its top line. Revenue came in at $60.80 billion, up 28% and above the consensus of $60.22 billion; ad revenue rose 27% with impressions up 14% and ad price per unit up 12%. But diluted EPS stood at $6.18, down 13% year-over-year versus expectations closer to $7.15. Costs surged 55% to $42.0 billion. Free cash flow dropped 91%. For its 2026 investment plan, the lower end was raised to $130–145 billion. The distinction the market now draws is not between spending and restraint—it’s between spending with visible conversion and spending on faith. Microsoft said demand continues to outstrip available capacity and new capacity will be monetized as soon as it’s deployed; it extended the useful life of data center assets from 15 to 25 years starting fiscal year 2027, which softens depreciation. Notably: $329.1 billion in data center lease commitments not yet started. Apple and Amazon report tonight into the same scrutiny. Four companies are spending roughly $724 billion this year and about $950 billion next year. No one asks anymore whether that’s a lot. The question is who can show the corresponding revenue—and last night, only one out of two could. Read the article: https://t.co/b9T0z7NDST