Meta Slips and Microsoft Soars on AI Earnings

Summary

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WSJ What’s News – Episode Summary

Episode Title: Meta Slips and Microsoft Soars on AI Earnings
Date: July 30, 2026
Host: Luke Vargas (The Wall Street Journal)

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Overview

This episode dives into the differing fortunes of tech giants Meta and Microsoft as they report their latest AI-driven earnings, providing a window into how the biggest “hyperscaler” companies are navigating the monetization of their massive AI investments. The episode also touches on key news in business, technology, global markets, and current affairs, from Europe’s intensifying wildfires to U.S. military and political developments.

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Key Discussion Points & Insights

1. Meta’s AI Strategy and Market Discontent (00:34 – 04:10)

• Investor Skepticism:
  Meta’s Q2 earnings report reveals record revenue but is overshadowed by concerns about aggressive AI investment and shrinking free cash flow. Markets remain unimpressed due to unclear paths to AI monetization.

  • Joe Stoner (WSJ Equity Markets Reporter) remarks,

    “The feeling is they're not quite satisfied just yet. A word I heard from an analyst at Quilter this morning was ‘vague’.” (02:22, Joe Stoner)

• Reality Labs Losses:
  Meta’s Reality Labs (wearable AI) division posted a $4.4 billion loss for the quarter, with little clarity on future profitability.

• Zuckerberg’s Philosophy on AI Investment:
  Host Luke Vargas shares a soundbite from Meta CEO Mark Zuckerberg summarizing his long-term vs. short-term AI approach:

  “It's always a portfolio, right. …I also think it would be foolish to basically just sell all of the compute and take a short term profit.” (02:58, Mark Zuckerberg)

• Short-term “Sugar Rush” vs. Long-term Growth:
  Discussions about Meta potentially selling surplus AI compute power were received with “amusement” by some analysts, as the company is not a chip reseller and remains behind in AI “hyperscaler” competition.

  “Meta isn't a chip reseller. It shouldn't be doing that as its main form of business… Deutsche Bank analysts have said that Meta is lagging behind its competitors.” (03:28, Joe Stoner)

• Stock Performance:
  The episode notes Meta’s ongoing stock slump, now at its longest losing streak ever.

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2. Microsoft’s Surge on AI Monetization (04:10 – 05:50)

• Azure Cloud Success:
  Microsoft’s Azure division surpassed $100 billion in revenue for FY2026, boasting over 40% quarterly growth.

• Copilot AI Revenue Momentum:
  A highlight is the rapid expansion of Copilot (Microsoft’s AI assistant), with paying users jumping by 10 million in the last quarter. Microsoft’s Chairman and CEO, Satya Nadella, spotlights a major Copilot deployment:

  “NHS England, for example, is rolling out CoPilot to 505,000 clinicians and staff—the largest health care deployment of its kind after a trial showed it saved employees an average of 43 minutes per day.” (04:47, Satya Nadella)

• AI as a “Super App”:
  Joe Stoner describes analyst enthusiasm for Microsoft’s integrated approach:

  “Its Copilot is like a super app. It uses both Anthropix and OpenAI technology… It owns the full AI stack.” (05:12, Joe Stoner)

• Business Model Shift:
  Microsoft is transitioning Copilot to usage-based pricing, a potential signal for broader AI monetization strategies going forward.

• Comparison to Meta:
  Analysts observe Microsoft is succeeding where Meta is not—turning AI investments into actual, recurring revenue.

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3. Earnings Snapshot: Tech and Consumer Giants (05:54 – 08:36)

• Upcoming Tech Earnings:
  Amazon and Apple are set to report after the closing bell; more analysis promised in the PM edition.

• Samsung:
  The world’s largest memory chip maker expects chip shortages through 2028 and posts a 200x jump in semiconductor division profits.

• Robinhood:
  Reports a nearly 50% surge in profits despite weaker crypto trading. CEO Vlad Tenev credits event-based contracts, mentioning:

  “Football season that's coming up. There's also the midterms which I think are extremely important… customers are going to want to trade them…” (06:57, Vlad Tenev)

• AB InBev (Budweiser):
  Sees a >1% sales boost from the World Cup, especially for Michelob Ultra in the US and Latin America.

• Starbucks:
  Outperforms revenue estimates, signals expansion into delivery with CEO Brian Niccol noting no margin tradeoff or “meaningful cannibalization.”

  “There's no trade off on margins and we have yet to see any meaningful cannibalization from the delivery channel…” (07:58, Brian Niccol)

• DoorDash:
  Gains drone delivery certification from the FAA. Liz Young (WSJ) highlights ongoing challenges:

  “...the rollout's been pretty sporadic… most of the people listening to this have not had this in their neighborhoods…” (08:36, Liz Young)

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4. US Strikes Iran & Military Supply Chain Moves (10:11 – 12:25)

• Retaliation Against Iran:
  The US military launches strikes after a surprise Iranian missile attack on US troops in Jordan, ending a brief ceasefire.

• Pentagon Procurement:
  The Department of Defense plans over $120 billion in outlays to bolster missile and shipbuilding capacity, including $59 billion to Lockheed Martin for Patriot missiles—each costing ~$4 million and years to build.

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5. US Political Developments (12:25 – 13:00)

• Senate Judiciary Delay:
  Plans to advance President Trump’s Attorney General nominee Todd Blanche are paused as negotiations occur over a disputed fund and auditing order. Reports of personal and political reasons factoring into Senatorial disputes.

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6. Europe’s Extreme Wildfires and Climate Response (13:00 – 13:45)

• Wildfire Scale:
  Fires across France, Spain, and Greece surpass firefighting capacity due to record drought, depopulated farmlands turning to woodland, and accumulated combustible material.

  “The problem is the scale, the number of fires, the intensity of fires. All of that has just exceeded the capacity of firefighting infrastructure…” (13:05, Ed Ballard)

  • Aging Aircraft:
    French firefighting planes, “old and frequently grounded,” become a political issue for President Macron.

  • Future Policy Debates:
    Expect intensified debate on resources, land management, and reinforcing cases for climate mitigation.

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7. Quick Positive Update: France Wildfire Evacuations Lifted (13:45 – 14:00)

• Over 80,000 French residents allowed to return as weather cools after fires; temperatures set to drop from 104°F.

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Notable Quotes

• Joe Stoner (02:22):
  “The feeling is they're not quite satisfied just yet. A word I heard from an analyst at Quilter this morning was ‘vague’.”
• Mark Zuckerberg (02:58):
  “It's always a portfolio, right… it would be foolish to… just sell all of the compute and take a short term profit.”
• Joe Stoner (03:28):
  “Meta isn't a chip reseller. It shouldn't be doing that as its main form of business… analysts have said Meta is lagging behind its competitors.”
• Satya Nadella (04:47):
  “NHS England… rolling out CoPilot to 505,000 clinicians and staff… after a trial showed it saved employees an average of 43 minutes per day.”
• Joe Stoner (05:12):
  “Its Copilot is like a super app... It owns the full AI stack.”
• Vlad Tenev (06:57):
  “Football season that's coming up. There's also the midterms which I think are extremely important…”
• Brian Niccol (07:58):
  “There's no trade off on margins and we have yet to see any meaningful cannibalization from the delivery channel…”
• Liz Young (08:36):
  “…the rollout's been pretty sporadic… most of the people listening to this have not had this in their neighborhoods…”
• Ed Ballard (13:05):
  “The problem is the scale, the number of fires, the intensity of fires. All of that has just exceeded the capacity of firefighting infrastructure…”

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Timestamps for Major Segments

• 00:34 – Meta & Microsoft earnings deep dive
• 02:22 – Analyst view on Meta’s AI strategy
• 02:58 – Mark Zuckerberg on long-term AI investments
• 03:28 – Meta’s chip resale conundrum
• 03:59 – Meta stock losing streak
• 04:10 – Microsoft’s Azure and Copilot successes
• 04:47 – Satya Nadella on NHS England Copilot deployment
• 05:12 – Analyst view: Microsoft’s AI monetization approach
• 05:54 – Earnings round-up (Amazon, Apple, Samsung, Robinhood, AB InBev, Starbucks, DoorDash)
• 06:57 – Vlad Tenev on Robinhood’s event contract growth
• 07:58 – Brian Niccol on Starbucks’ delivery channel
• 08:36 – Liz Young on DoorDash’s drone delivery challenges
• 10:11 – US military strikes Iran; Pentagon contracts
• 12:25 – Senate politics and Europe’s wildfires
• 13:05 – Ed Ballard on firefighting limits and climate
• 13:45 – France fire evacuees return as weather cools

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Tone and Style

The tone remains brisk, analytical, and fact-driven, consistent with The Wall Street Journal’s journalistic style.

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This summary delivers a thorough breakdown of the episode’s core business, technology, and global news takeaways for listeners who want the essential developments without listening in full.

Transcript

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[Joe Stoner]

meta

[Luke Vargas]

slides and Microsoft rallies as investors look for answers on how hyperscalers are turning AI spending into AI revenue. Plus, we'll look at the extreme weather fueling Europe's wildfires and the aging planes being used to fight them.

[Ed Ballard]

The problem is the scale, the number of fires, the intensity of fires. All of that has just exceeded the capacity of firefighting infrastructure.

[Luke Vargas]

And as the US Strikes back on Iran, the Pentagon proposes spending big on resupplying PATRI It's Thursday, July 30th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of what's news, the top headlines and business stories moving your world today. Investors are picking through earnings from Meta and Microsoft this morning and having their say on very different signals about how the companies plan to start making money from their AI buildouts. Meta shares are down off hours as its AI spending plans and dwindling free cash flow overshadowed record second quarter revenue. At the same time, Microsoft saw its shares jump after reporting strong cloud growth and big gains in paying AI subscribers. Well, here to recap how sentiment is shifting around those hyperscalers as we await results from two more later today is equity markets reporter Joe Stoner. Joe, let's talk about these companies in turn, starting with Meta, which is racing to catch up to its rivals in AI and to do that is spending big on everything from snapping up chips to buying data centers to hiring more folks. And it seems like a real preoccupation for investors in all of this has been what is this for exactly? Does the company have a plan to convert these investments into revenue? What are you seeing? Are markets satisfied with the answers they got from Mark Zuckerberg and others?

[Joe Stoner]

I think the feeling is they're not quite satisfied just yet. A word I heard from analyst at Quilter this morning was vague. Listening to Mark Zuckerberg on his earnings call, another analyst at XTB flagged to me that in their Reality Labs division, that's where they have kind of wearable AI. They lost $4.4 billion in the last quarter. It's not clear how that's going to turn into a profit.

[Luke Vargas]

Yeah, let's actually let listeners hear how Zuckerberg himself described these competing impulses around AI. On one hand, maybe wanting to monetize investments now or on the other, you know, sit on these chips, sit on the compute, find a purpose for them down the line.

[Interviewee / Executive (e.g., Mark Zuckerberg, Satya Nadella, Vlad Tenev, Brian Niccol)]

Here he was, it's always a portfolio, right. It's not like you don't want to only do long term things and you know, like, and not kind of prove the markets out that exist in the near term. But I also think it would be foolish to basically just sell the all, all of the compute and, and take a short term profit.

[Luke Vargas]

Joe Meta Stock soared almost 9% a month ago on reports that it might get into the business of selling off its excess AI computing power. And yet is now that that's just not lucrative enough of a return on all of this investment.

[Joe Stoner]

Yeah, so there was a bit of amusement among analysts when those reports came out because on the one hand, Meta isn't a chip reseller. It shouldn't be doing that as its main form of business. So as it kind of thinks through what it's going to do and whether it's going to sell this computation, there's a bit of encouragement. Deutsche bank analysts have said that Meta is lagging behind its competitors. So if it thinks that it can make more money in the long term by keeping its computation in house, then that's a good sign. On the other hand, as you say, the stock market loved selling chips in the short term.

[Luke Vargas]

The sugar rush of it all, right, Absolutely.

[Joe Stoner]

And now Met is on its longest losing streak ever as a stock. So it won't be the, as you say, sugar rush that investors were hoping for.

[Luke Vargas]

Let's switch to Microsoft. It obviously helps that one of its core businesses is doing very well. That's Azure, its cloud business revenue, it said, had surpassed $100 billion in that division for fiscal year 2026. That's on very strong 40 plus percent quarterly growth. But crucially on the AI front, we got signs that it is succeeding in converting its massive user base into paying AI customers. Saying Copilot, AI users who are paying for the service jumped by 10 million over the last quarter, thanks in part to what Chairman and CEO Satya Nadella said were some big new deals. Let's hear from him.

[Interviewee / Executive (e.g., Mark Zuckerberg, Satya Nadella, Vlad Tenev, Brian Niccol)]

NHS England, for example, is rolling out CoPilot to 505,000 clinicians and staff the largest HealthC deployment of its kind after a trial showed it saved employees an average of 43 minutes per day.

[Luke Vargas]

Joe 500,000 seats there. That is the enterprise AI marketplace that the Googles, the Anthropics, the OpenAI's of the world and others are competing in. And maybe Microsoft showing it's able to hold its own there.

[Joe Stoner]

Yeah, Microsoft seems to be doing what matter can't which is making money from its AI investments. Analyst at Quilter said to me this morning that its Copilot is like a super app. It uses both anthropic technology and OpenAI technology. It's not a standalone entity. It owns the full AI stack. One important move that analysts have flagged is this expansion subscription base for Copilot and its move away from a kind of seat based model to one more to do with usage. That is a signal of how Microsoft might be able to fully monetize AI in the future.

[Luke Vargas]

Reporter Joe Stoner covers equity markets for the Journal and Dow Jones Newswires. Joe, thank you so much.

[Joe Stoner]

Thank you Luke.

[Luke Vargas]

And we aren't done with hyperscaler earnings just yet as Amazon and Apple report after the closing bell. Our PM show will have top line results later on and we'll have any need to know analysis tomorrow morning in more earnings updates. Samsung shares are rallying after the world's largest memory chip maker so that it expects a chip shortage to last through 2028, leading customers to continue seeking multi year contract. It's also seeing robust demand for its advanced AI chips with its core semiconductor division posting a more than 200 fold increase in operating profit. Robinhood has reported an almost 50% jump in its quarterly profits even as revenue from crypto trading continued to slide. Instead to top analyst estimates, the company rode a number of tailwinds including the demise of a decades old day trading Rule, a blockbuster SpaceX IPO and as CEO Vlad Tenev explained, increased wagering on event contracts, a trend he expected to continue.

[Interviewee / Executive (e.g., Mark Zuckerberg, Satya Nadella, Vlad Tenev, Brian Niccol)]

Football season that's coming up. There's also the midterms which I think are extremely important. I mean they're going to be a topic of discussion and of course customers are going to going to want to trade them and hedge their portfolios and there's events just on a consistent basis.

[Luke Vargas]

Meanwhile, the other football helped to boost sales for AB InBev, the Budweiser brewer reported a more than 1% increase in beer sales through June, with the World cup boosting its Michelob Ultra brand across the US And Latin America. That continues a broader rebound that began earlier in the year as the world's largest brewer started moving past a period of sliding demand. Starbucks shares are up off hours after it beat revenue estimates for the quarter, in the latest sign that CEO Brian Niccol is turning around the coffee cellar. And next up for the company, expanding delivery, a sales channel where customers spend more without, as Nicol predicted, leading to declines in in store visits.

[Interviewee / Executive (e.g., Mark Zuckerberg, Satya Nadella, Vlad Tenev, Brian Niccol)]

Right now there's no trade off on margins and we have yet to see any meaningful cannibalization from the delivery channel. So we're really excited about it and pretty soon we'll have it also in our app.

[Luke Vargas]

And speaking of direct to consumer, DoorDash says it has secured a key certification from the F to use drones for delivery. However, as WSJ logistics and supply chain reporter Liz Young explains, that could be the easy part as the company tries developing its own drones and back end systems and faces competition from the likes of Amazon and Walmart in the fast emerging aerial delivery market.

[Liz Young]

Over the past few years, it's gone from this niche experience to something that more and more companies talk about. I've heard as I've talked to experts in this industry that they see a lot of consumers who try this out tend to order again via drone delivery. But of course right now the rollout's been pretty sporadic. I'm sure most of the people listening to this have not had this in their neighborhoods. It's been pretty limited to very specific regions of the United States as these operators have had to deal with regulatory obstacles, community concerns about like the buzzing overhead for example, and also just limitations of these devices flying in rain or storms.

[Luke Vargas]

DoorDash is set to report earnings next week after earlier this year posting double digit jumps in revenue and orders. Coming up, the Pentagon aims to lock in missile supply and the US Military hits back against Iran's surprise attack on troops in Jordan. We've got those stories and much more after the break.

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[Luke Vargas]

American forces struck Iran last night in what the military is calling a powerful response to Tehran's surprise missile attack on US Troops in Jordan earlier in the week. That attack shattered a brief ceasefire after both sides had paused strikes on Friday in order to give negotiators a chance to secure the opening of the Strait of Hormuz. Meanwhile, the Pentagon is hoping to lock in the supply of Patriot missiles and increase shipbuilding capacity by earmarking more than $120 billion to help contractors boost production. That includes nearly $59 billion to Lockheed Martin for Patriots, which can take down Cruise and ballistic miss missiles but cost around $4 million each and take years to produce. Replenishing munition stockpiles has been a pain point for the US Military, and the Trump administration was already planning to ramp up missile production before the war with Iran. Congress must still provide annual funding for the deals while staying on Capitol Hill. A Senate Judiciary Committee vote that had been planned for today to advance President Trump's nomination of Todd Blanche as attorney general to the Senate floor has been called off. That's as the administration tries to win over Senator John Cornyn of Texas and Thom Tillis of North Carolina. The two Republican holdouts want the Trump administration to permanently kill off a controversial $1.8 billion anti weaponization fund, which was created in agreement with Trump to end his lawsuit against the irs. And they're also asking for changes to an order from Blanche that ended pending tax audits against Trump and his businesses and appeared to provide sweeping protections against government investigations. Speaking to reporters, Trump said that he thought a vote on Blanche would be routine and suggested that Cornyn was upset at him for not endorsing him in a recent Senate primary in Texas, where Cornyn was defeated by Trump's pick, Texas Attorney General Ken Paxton. And slightly cooler weather is coming as a relief to crews battling fires that have swept across pockets of southern Europe in recent weeks, including in France, Spain and Greece. Climate and energy reporter Ed Ballard says that a confluence of factors have set the stage for this summer's extreme weather.

[Ed Ballard]

Western Europe's in a drought, and as the world gets hotter, Europe is increasingly enduring these long, hot droughts that dry out the landscape. And the current one came after a very wet winter. Over the longer term, much of Europe is more wooded than it was a few decades ago, thanks in part to the depopulation of agricultural land, especially in Spain. So you've had temperatures rising, droughts have been getting worse, and at the same time there's been this steady accumulation of flammable material that's waiting for a spark, and we've seen something called pyrocumulonimbus clouds, which is essentially when a fire creates its own thunderstorm. And that is not a normal weather phenomenon in this part of the world.

[Luke Vargas]

Ed says that the wildfires have been so intense they've overwhelmed firefighters and the resources on hand.

[Ed Ballard]

The problem is the scale, the number of fires, the intensity of fires. All of that has just exceeded the capacity of firefighting infrastructure, both in terms of the number of people to do the work, professionals and volunteers, and the equipment they can use. My colleagues wrote a story yesterday on a political argument that's developing in France over the country's limited number of water bombing planes, which are old and have frequently been grounded for maintenance. And Emmanuel Macron, the French president, has been criticized by his opponents for failing to replace them. And once these fires have finally been quenched, we can expect these debates to intensify both over what kind of resources we need to invest in, whether Europeans need to change the way their land is managed, and also whether these disasters strengthen the case for cutting carbon emissions.

[Luke Vargas]

In some other good news this morning, French authorities have given the go ahead for more than 80,000 people who'd been forced to evacuate in southwestern France to return home. Temperatures that had peaked there around 104 degrees Fahrenheit, or 40 degrees Celsius, are also set to drop today. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Daniel Bock. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening.

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