Magnificent 7 earnings: Meta, Microsoft and Tesla signal the next phase of AI-driven markets

The company posted fourth quarter revenue of $59.9 billion, up 24% year over year, and full-year revenue of $201.0 billion, up 22%. Diluted EPS for the quarter came in at $8.88, while free cash flow totaled $14.1 billion. Advertising remained the engine: ad impressions rose 18% year over year in the quarter, while average price per ad increased 6%.

Daily active people across Meta’s Family of Apps averaged 3.58 billion, up 7% from a year earlier, reinforcing the durability of its global engagement base. However, Reality Labs continued to weigh on results, posting a $6.0 billion operating loss in the quarter.

Meta returned significant capital to shareholders, repurchasing $26.3 billion of stock and paying $5.3 billion in dividends during 2025. At the same time, it is preparing investors for a sharp rise in spending. The company guided 2026 capital expenditures to $115 billion to $135 billion, largely tied to AI data center expansion.

“We had strong business performance in 2025,” noted CEO Mark Zuckerberg. “I’m looking forward to advancing personal superintelligence for people around the world in 2026.”

Microsoft’s fiscal 2026 second-quarter earnings reinforced its status as the enterprise backbone of the AI transition. Revenue rose 17% year over year to $81.3 billion, while operating income increased 21% to $38.3 billion. GAAP diluted EPS climbed 60% to $5.16.