MSFT Stock: Microsoft and Meta Stocks Dip as AI Expenditures Cause Investor Concern

Nov 01, 2024

Meta Stock: Shares of tech giants Meta (META) and Microsoft (MSFT) fell sharply in premarket trading as investors reacted to the companies’ earnings reports, weighing substantial investments in artificial intelligence infrastructure.

Meta shares dropped as much as 4.7% before paring losses, and Microsoft was down by 3.6% after both companies revealed intensified spending aimed at fueling their AI ambitions.

While both Meta and Microsoft surpassed Wall Street earnings estimates, investor caution followed Microsoft’s conservative sales guidance for the upcoming quarter and Meta’s increased outlook on capital expenditures, now estimated at $38 billion for the full year.

Microsoft CFO Amy Hood justified the spending as essential to meet the growing demand for AI, stating that half of the investment focuses on assets expected to generate returns over the long term. Meta reported similar optimism, highlighting rapid adoption of Meta AI as a driver for future growth.

Analysts have urged a “buy the dip” approach, viewing Microsoft and Meta’s AI investment strategies as a pathway to upward revisions. RBC Capital’s Rishi Jaluria sees long-term growth potential despite current concerns, positioning these tech stocks as attractive in the wake of temporary investor hesitation.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.

Halie Heaney is an accomplished author at SpeaksLY, specializing in international news across diverse categories. With a passion for delivering insightful global stories, she brings a unique perspective to current events and world affairs.