1 May 2025
If you are covering Meta and Microsoft’s latest results, please see the following comment from Ben Barringer, global technology analyst at Quilter Cheviot:
Microsoft
"Microsoft has delivered another impressive quarter, with revenue up 13% and profits climbing 19%, comfortably beating expectations by around 6% at the profit level. The real standout continues to be Azure, its cloud business, which posted 35% growth with AI services accounting for 16% of that increase. Demand for AI remains strong and persistent, and this is clearly filtering through into new business wins, with overall bookings up 18%. Azure remains exceptionally resilient, and the outlook points to continued momentum, with Microsoft guiding for 13–15% revenue growth next quarter and Azure growth of 34–35% – around 2.5% ahead of consensus expectations.
"Microsoft’s AI-powered Copilot saw usage surge 300% year-on-year, and its performance is encouraging given the company’s broader ambitions in enterprise AI. Elsewhere, LinkedIn delivered solid results, Xbox was steady, and Bing’s 23% growth suggests it is taking modest share from Google. Capital expenditure continues to climb as Microsoft focuses on building its own chips, and it expects CapEx to grow again over the next 12 months. All told, this was a strong set of numbers across the board, with shares rising 7% in after-hours trading as investors responded positively to the enduring strength of its cloud and AI franchise."
Meta
"Meta has also delivered a solid set of results, with revenue up 16% on a reported basis and 19% in constant currency, as better ad pricing and improved targeting, helped by AI, boosted the core business. Operating profit grew by 35%, representing a substantial 14% beat versus expectations.
"Fears that AI investment was tapering off appear to have been misplaced. The company raised its CapEx guidance from $60–65 billion to $64–72 billion, reinforcing its long-term belief in AI’s central role.
"Management noted some uncertainty around demand from Chinese advertisers such as Temu and Shein, which contributed to a more cautious tone in their guidance, but early signs from April remain healthy.
"Mark Zuckerberg was clear on his strategic focus areas, which were the development of AI agents, improvements to ad targeting, richer content formats, and expanding AI-powered business messaging, particularly through WhatsApp. Meta AI is now live within WhatsApp and as a standalone agent, and the company continues to push forward with its hardware ambitions, including wearable tech such as Ray-Ban smart glasses developed with EssilorLuxottica.
"Following concerns earlier this year around ad spend volatility, this quarter’s results provide reassurance. The core business is performing well, AI remains a key growth lever, and Meta has demonstrated both cost flexibility and strategic agility."
