Meta, Microsoft Earnings Spark $500B Tech Rally

Meta and Microsoft both reported strong earnings, with Meta's shares rising over 9% and Microsoft's up 8%, fueling a $500 billion surge in the market value of major AI-focused tech companies. Meta posted a 22% increase in Q2 2025 revenue to $47.52 billion and a 36% rise in net income to $18.34 billion, exceeding analyst expectations amid strong advertising performance and robust user growth. Meta is ramping up investment in artificial intelligence, raising its 2025 capital expenditures forecast to $66–$72 billion and intensifying a talent war to drive 'superintelligence' projects. Wall Street remains optimistic despite concerns about rising costs and Meta's strategic direction in AI. Microsoft's earnings were also driven by the continued growth of its Azure cloud business. Analysts caution that Meta and other tech giants must soon clarify how their significant AI investments will yield long-term financial and societal benefits.