Meta, Microsoft surge on AI-fueled earnings 31/07/2025

HOT stories for today

US market wrap:

• During Wednesday’s regular session, the S&P 500 ended in the red after Federal Reserve Chair Jerome Powell indicated that the central bank is still not prepared to lower interest rates. The decision wasn't unanimous; Fed officials Michelle Bowman and Christopher Waller opposed maintaining the benchmark rate within the 4.25% to 4.50% range. The broad-market index dipped 0.12%, while the Dow Jones Industrial Average declined by 0.38%. Meanwhile, the Nasdaq Composite edged up by 0.15%.
• Later that evening, former President Donald Trump revealed that the United States had finalized a trade agreement with South Korea, establishing tariffs at 15%, a decrease from the previously proposed 25%. Following the market’s close, tech giants Microsoft and Meta, members of the so-called “Magnificent Seven”, surged approximately 8% and 11%, respectively, in after-hours trading, buoyed by stronger-than-anticipated quarterly earnings.

Meta, Microsoft surge on AI-fueled earnings

• Meta and Microsoft both crushed earnings expectations, sending their stocks soaring in after-hours trading, Meta up 11.5%, Microsoft above $550, briefly topping a $4.1 trillion valuation. Meta’s blockbuster quarter confirmed its status as an AI frontrunner. Despite spending $17 billion on capital investments, profitability surged, EPS jumped 38% to $7.14, and operating margins hit 43%. CEO Mark Zuckerberg credited AI-driven ad tools and smarter content recommendations for boosting engagement and revenue. Time spent on Facebook and Instagram rose 5% and 6%, respectively. Meta also teased early AI tools for video creators, further fueling investor excitement.
• Meanwhile, Microsoft reported its fastest revenue growth in over three years. Quarterly sales hit $76.4 billion, driven by 39% Azure growth and strong AI demand. Microsoft 365 Copilot now counts 100 million monthly users, helping lift productivity software revenue. Capital spending is expected to exceed $30 billion in the next quarter alone as Microsoft rapidly builds out AI infrastructure. Both tech giants are proving that massive AI investments can deliver both innovation and impressive financial returns.

Stocks on the move:

• Qualcomm (QCOM): Shares of the chipmaker declined 5% even after reporting fiscal Q3 results that topped expectations. Qualcomm posted adjusted earnings of $2.77 per share on revenue of $10.37 billion, slightly above analysts’ forecasts of $2.71 EPS and $10.35 billion in revenue, according to LSEG.
• Ford Motor (F): The automaker dropped 4% in after-hours trading Wednesday after revealing its 2025 EBIT outlook includes a net $2 billion "tariff-related headwind," comprising a $3 billion gross negative impact, partially offset by $1 billion in mitigation measures.
• Arm Holdings (ARM): The chip design firm slid 8% following fiscal Q1 revenue of $1.05 billion, missing the $1.06 billion analysts had projected. Adjusted earnings came in at 35 cents per share, matching expectations.
• Carvana (CVNA): Shares of the online used-car retailer surged 16% after second-quarter results beat forecasts. Carvana earned $1.28 per share on $4.84 billion in revenue, topping the Street’s estimates of $1.11 EPS and $4.59 billion in sales.
• Robinhood (HOOD): The trading platform rose about 1% after delivering a strong Q2, with earnings of 42 cents per share and $989 million in revenue. Analysts polled by LSEG were expecting 31 cents EPS and $908 million in revenue.

Watchlist: META, MSFT, HOOD, ARM, MA, ABBV, QCOM, CVNA

Today’s action

• Asia-Pacific markets mostly declined Thursday after the Bank of Japan held interest rates steady at 0.5% for the fourth consecutive meeting—no surprise to investors. Sentiment was also weighed down by the U.S.’s sweeping new tariffs: a 15% blanket duty on South Korean imports and a 25% tariff on Indian goods, alongside an unspecified penalty.
• In contrast, U.S. equity futures jumped, lifted by strong earnings from Microsoft and Meta. S&P 500 futures rose 0.94%, Nasdaq 100 futures surged 1.34%, and Dow futures added 132 points. Attention now shifts to June’s personal consumption expenditures (PCE) index, the Fed’s preferred inflation gauge, due later today. Earnings season remains in full swing. Comcast, Mastercard, CVS, AbbVie, and Shake Shack report before the open, while tech heavyweights Apple and Amazon are set to post results after the bell.

Bitcoin

• Bitcoin slid under $117,500 on Wednesday after failing to reclaim the $120K mark, with traders eyeing further downside. Whale selling and weak momentum continue to weigh on the price, despite strong U.S. macro data.
• On the regulatory front, the Trump administration released its long-awaited crypto policy report, signaling support for the industry. The SEC is backing off son everal high-profile investigations, while Trump proposed a strategic crypto reserve, boosting optimism, though key legal questions, especially around NFTs, remain unresolved.
  Watchlist: BTC: 99,000–123,000 | ETH: 3,000–3,800 | SOL: 200–260

Forex

• EUR/USD found support around the 1.1400 mark in Thursday’s Asian session, as the U.S. Dollar eased after a five-day rally. Traders are scaling back expectations for a Fed rate cut in September, keeping the greenback firm overall. Attention now turns to upcoming Eurozone inflation data (HICP) and the U.S. July jobs report (NFP) for fresh direction.
• Meanwhile, the Japanese Yen held modest gains after the Bank of Japan left rates unchanged but raised its inflation outlook, hinting at possible hikes later this year. Market reaction was muted, with traders awaiting more clarity from BoJ Governor Ueda’s press conference.
  Watchlist: EUR/USD: 1.1000–1.1650 | USD/JPY: 140–162

Basic Materials

• Gold (XAU/USD) bounced back during Thursday’s Asian session, recovering from a one-month low as the U.S. Dollar paused after hitting a two-month high. The rebound comes amid dip-buying interest, though gains remain capped by the Fed’s hawkish stance and fading hopes for a September rate cut. Traders now await the U.S. PCE inflation data for fresh direction.
• Meanwhile, WTI crude climbed near $69.80, its highest in over a month, despite a surprise jump in U.S. oil inventories. Geopolitical speculation also fueled buying, as former President Trump vowed to end Russia’s war in Ukraine within 10 days if re-elected, raising fresh uncertainty in energy markets.
  Watchlist: Gold: 2,600–3,500 | US Oil: 55.60–75.80

Economic Calendar (EST):

08:30 am: Core PCE Price Index
08:30 am: Unemployment Claims
09:45 am: Chicago PMI


Earnings:

MA                   Mastercard Inc.
ABBV               AbbVie Inc.
KKR                 KKR & Co. Inc.
CMCSA           Comcast Corp.
UL                    Unilever Plc.
SO                   Southern Company
BMY                 Bristol-Meyers

AMC (After Market Close): AAPL, AMZN, SYK, MSTR



The TEFS Analyst team wishes you a successful day!