Meta Dropped, Amazon and Microsoft Rallied: Don’t Panic, Accumulate

Meta Platforms (NASDAQ:META) fell 20% since July 15th, adjacent though FQ2 2026 gross bushed estimates. Sales roseate 28% twelvemonth implicit twelvemonth to $60.8 billion, up of the $60.3 cardinal Wall Street wanted, and advertisement impressions climbed 14%. Investors aren't punishing Meta's advertisement business, they're punishing what it costs to run.

Why Did it Tank?

What soured the absorption was a premix of an net miss, EPS of $6.18 versus a $7.22 consensus, tied to ineligible and severance charges, and a capex fig that keeps climbing. Guidance has moved 3 times since spring, astir precocious to $130 cardinal to $145 cardinal for the year, and escaped currency travel for the 4th came successful nether $1 cardinal erstwhile lease payments were counted in.

The much absorbing wrinkle is what Meta didn't thin into. Reports earlier net had Zuckerberg's squad successful aboriginal talks to lease up to $10 cardinal of AI compute to Anthropic, a imaginable caller gross enactment that would person fixed the marketplace precisely the benignant of impervious constituent it wanted: grounds the AI walk tin make currency beyond powering Meta's ain apps. On the call, though, absorption was notably cooler connected turning spare information halfway capableness into a broader unreality business, saying it inactive prefers moving its ain chips internally wherever returns are higher.

Zuckerberg tried to reframe the spending communicative connected the call, saying Meta is fielding offers to bargain its compute capableness "at a important premium," but investors were near weighing that upside against a guidance chopped arriving alongside the company's biggest AI measure yet. Meta guided 3rd 4th gross to $61 cardinal to $64 billion, beneath the $63.2 cardinal analysts had modeled. Free currency travel told an adjacent starker story, falling 90% twelvemonth implicit twelvemonth to conscionable $784 million.

Charts

Weighing Meta Against Microsoft and Amazon

Microsoft (NASDAQ:MSFT) reported the aforesaid nighttime and had an easier clip of it. Azure grew 43%, its fastest gait since 2022, beating the astir 40% analysts expected. That spread successful reaction, Meta down treble digits, Microsoft up, says little astir who spent much connected AI and much astir who showed impervious it's paying off.

Amazon.com (AMZN) besides reported beardown AWS apical enactment results past nighttime and the banal is up much than 15% this morning.

Hedge funds look to person favored Meta implicit Microsoft successful Q1 2026. Meta's money number roseate to 262 successful the archetypal 4th of 2026 from 256 the 4th before, portion Microsoft's fell to 282 from 312. On valuation, Meta is the cheaper of the two. Its guardant P/E sits astir 18, versus astir 20 for Microsoft. However, Meta is carrying the heavier bearish stake of the two. Its abbreviated involvement sits astatine astir 1.72% of its float, compared with astir 1.24% for Microsoft.