The US stock markets organized an impressive recovery on Wednesday, after initially dropped strongly at the rear of a lower than expected Q1 GDP report. The S&P 500 has managed to eliminate a gain and the Nasdaq closed a touch. We mentioned in our GDP exam that the details of the report were brighter than the figure of the head suggested, however, the news that the commercial negotiations of the EU and the United States would also begin to stimulate the feeling. The term markets extended trade in trade after hours, which suggests that the recovery rally, which increased the S&P 500 by 8% in a week, could be extended on Thursday.
For the moment, fears of the end of American exceptionalism seem a little extreme. In addition to the resumption of American actions, treasury bills surpass their global peers on the sovereign debt markets, and even the dollar tries to put a level after a start of bruises until 2025.
Technological income was also up to the point this evening. Microsoft and Meta beat the expectations of profits, which could lead some to say that the concerns concerning the threat of China for the domination of the AI was exaggerated. Below, we take a closer look at Meta and Microsoft income.
Microsoft: IA investment begins to bear fruit
While we led to these results, the concerns about Microsoft's commitment to AI were to the point. Earlier this year, Microsoft has kept certain data centers, which left some analysts fearing that the company reduces its passage to AI because it was not profitable. However, the real results of the last quarter can appease fears of Microsoft's engagement towards AI.
The company has registered a turnover of $ 70.1 billion for the last quarter and an 18% increase in profits. The net profit was $ 25.8 billion, while profit per share was $ 3.46, easily beat estimates of $ 3.21. So, have investors been too ready for technology and AI? Microsoft's results would suggest yes. Azure and other cloud income of the company, which is the Center of the AI, increased by 35%, beating forecasts for an increase of 31%. The company has declared strong growth in income in most segments, and AI was the main engine. For example, Microsoft 365 commercial products and Cloud income increased by 11%, the Microsoft 365 consumption division also saw cloud products and income from 10%. Its dynamic products and cloud income increased by 11%. The intelligent cloud increased revenues by 21%, pulled by Azure and other cloud products.
Microsoft continues to spend on CAPEX. It will spend 16.75 billion dollars, greater than the estimates of $ 16.28 billion. In the past, CAPEX expected the growth of frightened investors, however, now that the company generates profits from its AI activity, the market can encourage higher levels of CAPEX expenses to increase growth. Microsoft's share leaps by almost 6% in the event of negotiation after hours, which raises other Big Tech actions. Amazon's share price is higher by almost 3% Wednesday evening, before its profits report tomorrow. NVIDIA's share price is also higher by 3.3%because Microsoft's results increased well for the demand for NVIDIA fleas. Microsoft is the biggest NVIDIA customer and flea sales in Microsoft represent 18% of NVIDIA annual income.
Overall, Microsoft's results can lift the technological sector as we enter the end of the week, which could help the technological sector playing other American stock market sectors, because it seems that Big Tech is back.
Meta is gaining advertising revenues because he bet the house on the AI
The good news did not stop there. Meta also declared a turnover of $ 42.3 billion and a net profit of $ 16.64 billion, profit per share, estimates of $ 6.40, against $ 5.33. It is a sign that the meta can increase its profitability during unstable times and can mix storms of market volatility. The company also displayed advice in the future and said it expected T2 revenues between $ 42.5 billion and $ 45.5 billion, the estimate was $ 44.06 billion, Meta’s income range therefore exceeded estimates.
Meta also significantly increased its CAPEX expenses to $ 72 billion this year, compared to $ 65 billion three months ago. It is another sign of confidence in the profitability of the AI, because Meta said that she wanted to be a “leader of AI”. The company also considers commercial messaging as the next major area of growth.
The company generated 98% of its revenues from advertising sales, which suggests that the company still depends on its cow of advertising income to pay the CAPEX expenses necessary to make it an AI leader. Since Meta's advertising revenues have proven to be resilient at the rate of troubles, the prospects for Meta's investment ambitions seem good.
Meta’s equity price is 5% higher after hours of negotiation, which suggests that it could be a big day for Wall Street on Thursday. If Meta can prolong the 6% gains on Thursday, it could go into a positive territory for the year.
GDP and American profits provide a platform for stock market recovery
Overall, although the American economy has slowed heavily in the first quarter, part of this commercial data that could be reversed. Added to these expenses and investment were both strong, which suggests that the fundamental principles of the American economy have not been permanently damaged by pricing disorders. Meta and Microsoft gains reports also stimulated the hope that Big Tech can resist the price storm. Apple will be another test, however, because it has a greater consumption element and is highly exploited for China, even if it reports weakness in its income, it may not weigh throughout the sector.
Overall, these results give Tech a solid platform to recover and potentially erase the losses recorded earlier in 2025.
