A wave of investor optimism swept through Wall Street asMeta and Microsoft shares soared following robust earnings and deepeningcommitments to artificial intelligence. Meta jumped 12% and Microsoft gained 5%after reporting results that easily topped analysts’ forecasts, with bothcompanies outlining major capital expenditure plans to fuel their growing AIambitions.Microsoft’s rally pushed it past a $4 trillion market capfor the first time, placing it alongside Nvidia in the exclusivetrillion-dollar club, CNBC reported. The milestone came as the software giant reported an 18%year-over-year revenue increase in its fiscal fourth quarter, reaching $76.44billion. Its net income climbed to $27.23 billion, or $3.65 per share, from$22.04 billion a year earlier.Meta delivered a similarly strong performance, reporting$47.52 billion in second-quarter revenue, up 22% from the previous year. Netincome surged 36% to $18.34 billion, or $7.14 per share.Capex Signals Bigger AI Bets AheadWhat is more interesting is the scale of investment in AI infrastructure. Meta raised the floorof its 2025 capital expenditures range, now expecting to spend between $66billion and $72 billion—up from a previous estimate that started at $64billion. Meanwhile, Microsoft projected over $30 billion in fiscal Q1 capex andfinance leases, significantly ahead of market expectations, which hoveredaround $24.2 billion.The spending spree has wide-reaching implications. Analystsat Citi noted that chipmakers like Advanced Micro Devices (AMD) and Broadcomstand to gain from the increase. Microsoft accounts for about 8% of AMD’srevenue, while Meta makes up 2% of Broadcom’s. At Meta, the AI drive isn’t just about servers and chips.CEO Mark Zuckerberg has ramped up hiring and recently announced a $14.3 billioninvestment in Scale AI, a data-labeling startup, along with the launch of MetaSuperintelligence Labs. Morgan Stanley acknowledged the strength of Meta’s corebusiness but questioned the pace of its AI expansion.Today Mark shared Meta’s vision for the future of personal superintelligence for everyone. Read his full letter here: https://t.co/2p68g36KMj pic.twitter.com/Hpzf77jAiG— AI at Meta (@AIatMeta) July 30, 2025Microsoft’s Momentum Builds on Generative AIBarclays analysts remained upbeat about Microsoft’sprospects, noting continued strength in data center demand and the company’spositioning in generative AI. Despite lingering questions about the scale and speed oftheir AI investments, Meta and Microsoft made clear they have no intention ofpulling back. For chipmakers, infrastructure firms, and investors betting onAI’s rise, that may be just what they wanted to hear.This article was written by Jared Kirui at www.financemagnates.com.