Big Tech’s AI bet intensifies as earnings expose widening gaps
Microsoft Cloud revenue surpassed $50bn for the first time
30 January, 2026
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Recent earnings from Meta Platforms, Microsoft and Tesla highlight how the world’s largest technology companies are doubling down on artificial intelligence, even as they face differing pressures on margins, capital expenditure and investor expectations, according to eToro.
Meta delivered a strong earnings beat, with fourth-quarter revenue rising 24 per cent year on year and first-quarter guidance coming in well ahead of market expectations. The performance underscored resilient advertising demand and improving AI-driven monetisation. Daily active users across Meta’s Family of Apps increased 7 per cent to 3.58 billion, while ad pricing rose 6 per cent during the quarter.
Commenting on the results, Zavier Wong, market analyst at eToro, said Meta’s aggressive AI push is becoming increasingly evident, with 2026 capital expenditure guided at $115–135bn as the company builds out infrastructure and talent around its superintelligence labs. He added that for investors previously cautious following the Metaverse investment cycle, management’s expectation that operating income will grow again in 2026 suggests this phase of spending is being driven by tangible demand and supported by Meta’s core advertising engine.
Microsoft also reported a solid quarter, beating expectations on both revenue and operating income. Revenue rose 17 per cent to $81.3bn, while Azure growth of 38 per cent confirmed sustained enterprise demand for cloud and AI services. Microsoft Cloud revenue surpassed $50bn for the first time.

Despite the strong results, Microsoft shares slipped in after-hours trading as investors focused on record quarterly capital expenditure of $37.5bn, which exceeded forecasts.
Wong noted that capital expenditure remains the primary concern for investors, with questions around margin pressure and the pace at which large-scale AI investments translate into monetisation. He added that while Microsoft’s close relationship with OpenAI reinforces its leadership in enterprise AI, it also introduces concentration risk. For now, Microsoft appears to be investing to meet existing demand rather than speculating on future growth, suggesting investors may need to exercise patience.
Tesla’s performance was more mixed. Revenue declined 3 per cent year on year, marking the company’s first annual revenue contraction in 2025, driven by lower vehicle deliveries and reduced regulatory credit income. Adjusted earnings per share exceeded expectations, and gross margins recovered to just over 20 per cent, easing some concerns around pricing pressure and cost control in its core automotive business.
According to Wong, Tesla’s valuation is increasingly influenced by its long-term ambitions rather than near-term vehicle performance. The $2bn investment in xAI, alongside developments in robotaxi services, Optimus humanoid robotics and energy storage, reinforces Tesla’s positioning as an AI, robotics and autonomy platform. However, he cautioned that vehicle revenues are declining, free cash flow remains under pressure, and many of these future initiatives are capital intensive and uncertain, widening the gap between current fundamentals and long-term expectations.
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