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BofA: AI LLMs

MSFT has been rewarded by AI spending converting more visibly into Azure growth, Copilot adoption and a large backlog, while META faces heavier free cash flow problems due to commitment to AI capex. META’s ad engine is still working and the future ROI on AI capex leads me to believe that there is still growth, not all doom and gloom for META

$Microsoft(MSFT.US)

Microsoft finally delivered the strong answer the market had been waiting for. Robust Azure growth and solid AI demand helped ease fears that massive AI investment was turning into a cash-flow trap.

More importantly, the earnings restored confidence across the sector. Over the past few weeks, investors had become increasingly worried about soaring capex, negative free cash flow, and whether AI spending would ever generate meaningful returns. Microsoft’s results didn‘t answer every question, but they proved that AI infrastructure investment can translate into real business growth.

One earnings report won’t solve every concern, but it has certainly reduced the panic. For now, Microsoft has reminded the market why it‘s still viewed as one of the highest-quality AI companies.

@Captain's Treasure

Finally emerge as a winner since March, will re enter soon for near term ha

🌟🌟🌟Wall Street has just suffered a bruising session as a toxic cocktail of AI disillusionment, geopolitical anxiety & a fractured Federal Reserve sent major indices plunging.

$Microsoft(MSFT.US)vs $Meta Platforms(META.US)

Microsoft's monetisation triumph: Shares are up 8.18% after earnings report because CEO Satya Nadella proved that massive AI Capex are translating into tangible exploding revenue with Azure Cloud jumping 40%.

Meta's free cash flow crisis: Shares dropped over 7% after CEO Mark Zuckerberg revealed that costs exploded 55%. Investors panicked as 2026 Capex was raised to a huge USD 130 billion to USD 145 billion, devastating quarterly free cash flow.

Which is a better buy?

I vote Microsoft as its Azure Cloud growth surged 40%, directly proving that its massive AI Capex is translating into immediate enterprise contract revenue.

Beyond AI, Microsoft's core software ecosystem - Office 365, Windows, LinkedIn provides a highly resilient, recession proof revenue cushion.

I also like Microsoft's superior capital efficiency as it is expanding capacity in line with enterprise demand, keeping its profit margins intact despite heavy infrastructure building.

However just one single quarterly results does not make or break a company. Both Microsoft and Meta are great companies with strong moats. I would evaluate them as a multi year, long term prospects and approach current pullbacks as a great buying opportunity.

U.S. stocks rebounded (SPX +0.4%, NDX +0.8%) on strong $Microsoft(MSFT.US) cloud growth, reassuring investors that AI investments are paying off and no further escalation in hyper scaler Capex, outweighing inflation worries and a jump in 30-year treasury yields after the Fed held rates steady. $Meta Platforms(META.US) fell pre-market on lighter 3Q rev guidance. Investor focus remains on potential overspend on AI Capex and likely returns; S&P 500 FY’2026 EPS estimates +25% YoY to $346, equating to a 21.1x forward P/E (4.7% earnings yield) in line with 10-year treasury yields. Escalation in U.S.-Iran conflict continues. Caution advised on $Tesla(TSLA.US) due to declining long-term earnings estimates, likely commoditization of autonomous ride-hailing, and a stretched valuation.

$Microsoft(MSFT.US)sharp share price increase on 30 July 2026 was driven primarily by a strong quarterly earnings report that exceeded Wall Street's expectations.Management projected Q1 FY2027 revenue of approximately US$90.4 billion (midpoint), ahead of market expectations. The upbeat outlook reassured investors that AI-driven demand remains strong.Investors had been concerned that Microsoft's heavy AI spending might take years to pay off. However, management highlighted more than 30 million paid Microsoft 365 Copilot users and a US$678 billion commercial cloud backlog, indicating strong future demand.Although Microsoft continues to invest aggressively in AI infrastructure, it generated US$19.6 billion in free cash flow during the quarter. This helped reassure investors that the company can continue funding AI expansion while maintaining strong financial performance.For long-term investors, these results reinforce Microsoft's position as one of the leading beneficiaries of the ongoing AI transformation. However, after such a strong move, short-term volatility is still possible if future quarters fail to meet these elevated expectations.

The oil price situation is erratic. One day it is up and the next it is down. This is why risk management is essential.

$Microsoft(MSFT.US)

Summary of Microsoft FY26 Q4 Earnings Call

Key Takeaways

(1) Financial Performance & Returns:

Microsoft returned over $10.2 billion to shareholders in Q4 ($43+ billion for the full fiscal year). Quarterly revenue and earnings exceeded expectations, achieving a 67% gross margin and a 45% operating margin. Commercial Remaining Performance Obligations (RPO) jumped 84% year-over-year to $678 billion (+25% excluding OpenAI commitments).

(2) Future Outlook & Guidance

For FY27 Q1, revenue is projected at $89.85–$90.95 billion (+16%–17% YoY), driven by strong Intelligent Cloud growth (+33%–34%), with Azure revenue expected to grow around 45% YoY. For full-year FY27, Microsoft anticipates double-digit growth in total revenue and operating income, with free cash flow remaining positive. Windows OEM and Devices revenues are expected to fall nearly 20% due to weaker PC demand and supply chain cost inflation.

(3) Capex & Accounting Policy Changes

Quarterly capex reached $41.0 billion. Microsoft extended the estimated useful lives of datacenters and office buildings from 15 to 25 years starting FY27. This shifts more future datacenter leases from finance to operating leases, revising the CY2026 capex outlook to approximately $175 billion without altering underlying investment plans.

(4) AI & Cloud Infrastructure

Microsoft added 31 datacenters in Q4 and 1GW of capacity. Enterprise AI adoption expanded rapidly via Microsoft Foundry, which now serves over 100,000 customers.

(5) Shift in Market Sentiments

While previous earnings left investors questioning “When will the massive AI investments pay off?”, this quarter provided definitive evidence that AI spending is directly driving accelerated cloud revenue growth, while management successfully contained margin erosion and clarified its long-term spending plans.

MSFT FY4Q26 First Take. Amid an earnings deluge this read is a touch late, but the takeaway is clear: the leadership rotation has swung back in Microsoft's favor. Four key points:

1) Azure re-acceleration: the Jun quarter grew 43% YoY. Guidance points to 45% next quarter, with 2H growth running ahead of 1H.

2) Capex did not spike: spend was $41bn this quarter, with next quarter guided to $50bn. That implies CY 4Q at approx. $52bn and keeps the run-rate on track for CY2026 capex of ~$200bn including leases. For FY2027, management still guides to YoY growth.

A small wrinkle: by extending useful lives on long-duration assets, some items now qualify as operating leases and no longer count toward capex. This technically lowers CY2026 reported capex to ~$175bn.

3) Making money: with AI a bigger mix in cloud, GPM should have compressed, yet the actual pullback was modest. Higher revenue amplified operating leverage and drove a sharp decline in opex ratio, helped by ~5k headcount reductions this fiscal year. As a result, margins rose rather than fell.

Note an important timing point: Microsoft began ramping capex in 2Q23 and has kept it elevated for three years, but D&A remains light, with the latest quarter even down YoY. Early capex skewed to long-lived assets and useful lives were extended this time, delaying expense recognition. Starting in 3Q25, however, shorter-cycle assets like servers will be purchased in size, so the depreciation headwind has yet to fully bite.

4) Cash to spare: unlike Alphabet, Tesla, and Meta, whose aggressive spend has strained cash flows, Microsoft's cash capex excluding finance leases remains in the $30–35bn range. Based on the qualitative capex guide and revenue trajectory, free cash flow should stay positive in the new fiscal year.

Overall, Microsoft posted a 'help-yourself' quarter in a market that is turning cautious on AI infrastructure spending elsewhere. Growth, margins, and cash are all in place, and in today's setup and risk appetite, the long-awaited rotation has finally come back to Microsoft. $Microsoft(MSFT.US)

Microsoft share price up after hours, but the Meta Platform shares price down. is it a good buy for Meta Platform now ? look like attractive share price coming soon

Microsoft is an excellent business like Meta but it gets rewarded because the area of concern for it's last earnings call was addressed and the rest of the resulys are still beating market expectations. It is best to do our own analysis to build conviction, stay invested instead of being swayed by sentiments like those happening to Meta now. is meta a bad business now? I doubt so.

What a week it has been. This is what sentiment is. At the top, everyone wants to buy. Down here, no one wants to buy. But prices are much cheaper here. Thats how trends are also. Not many has the courage to do things using their own thought process.

MSFT still strong going besides AAPL. The rest simply keep falling like no nobody business. Left 1 more day to close this dry July. Also plenty opportunity to go for shopping spree. What else can do not do after few weeks of rough ride🎢🛼 am going to grab a few stocks either on Friday or coming Monday. What do your suggest, can drop your opinion as now it is all Free Falling stocks in particular!!🤔💭🌞👀🧋

Market got exactly what it wanted: proof AI pays. MSFT +8% on Azure +43% shows enterprises are actually writing checks. META -10% on $784M FCF is just the cost of building the metaverse of AI — they’ll get there. Fed holding is fine because inflation is cooling. Korea halting is local, not systemic. This is healthy rotation into cash-generative AI, not a crash.

Standard Chartered Bank Hongkong stocks profit rose. Though AI trading becomes the trend, I wonder on the businesses purposes.

Korea stocks fall is a concern.

I wonder on the jobless percentage on Thursday report.

Today is 30 July and why is there a report for 31 July on the employment cost?

However, the oil price increases.

Shaky times because it’s earning season and plenty of geo uncertainties. DYODD well

Microsoft's results reinforce my conviction that the AI investment cycle is still intact. The market is no longer rewarding AI spending alone—it wants clear monetisation. Azure's 43% growth and stable capex show Microsoft is converting AI investments into real earnings, which is exactly what investors have been waiting to see.

Meta's weak free cash flow doesn't make me bearish on AI. To me, it highlights execution risk rather than the end of the AI trade. Companies that can demonstrate profitable AI deployment will continue to outperform, while those with rising spending but slower returns may face more pressure in the near term.

I'm staying constructive on the sector and will continue accumulating quality names during volatility, especially semiconductor and AI infrastructure leaders. With Apple and Amazon reporting next, I think this earnings season will further separate the true AI winners from the rest.

Markets are entering a high-volatility window with economic data, earnings, and geopolitical headlines all colliding. I’m keeping more cash on hand and waiting for higher-conviction setups instead of reacting to every headline.