Microsoft Shows the "Magnificent Seven" What AI Investment Looks Like

In this episode of Motley Fool Hidden Gems Investing , Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:

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Tyler Crowe: Two stocks diverge on an earnings day today on Motley Fool Hidden Gems Investing . Welcome to Motley Fool Hidden Gems Investing . I'm your host, Tyler Crowe. Today, I'm joined by longtime Fool contributors Lou Whiteman and Matt Frankel. It is the depths of earning season, so we're going to try to hit as many companies as we can in what we call a relatively short show that we have here. We're also going to hit some earnings questions. We want to start with earnings, especially with the two magnificent seven companies that happened to report after the close yesterday, and that's Microsoft and Meta .

Guys, there was some pretty large divergence between what the market thought of those results. As we're taping right now, shares of Meta are down about 8.8% while Microsoft is up a whopping 15%. Now, last quarter and throughout the show, we have discussed Meta's, what is all this spending for question, quite a bit. But what stands out to me in the stark contrast of these two earnings reports, is that Microsoft is the first major AI capex spending company to announce earnings and see a positive earnings reaction in the quarter. Is this just a one-time blip like yeah, things look nice comparatively, or is there some through line here that shows Microsoft is doing the right thing? As we discussed previously with Alphabet and here with Meta, that they're making riskier bets.