Stocks shot out of the gate Thursday thanks to a pair of strong Big Tech earnings reports. The main indexes were lower by the close, though, as caution set in ahead of tomorrow's jobs report and President Donald Trump's tariff deadline.
Facebook parent Meta Platforms (META) and tech giant Microsoft (MSFT) led the charge higher early on, thanks to the mega caps' strong quarterly results.
For its second quarter, Meta reported earnings of $7.14 per share, up 38% year over year, on revenue of $47.5 billion (+22% YoY).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The Facebook parent also lifted the low end of its full-year capital expenditures forecast, now expecting spending in the range of $66 billion to $72 billion, up nearly 76% year over year at the midpoint.
Meta is "firing on all cylinders," says CFRA Research analyst Angelo Zino. "We are confident in META's AI-driven growth opportunities as the company pursues aggressive but warranted spending given long-term prospects."
Thanks to Thursday's 11.3% surge, Meta's share price is now at an even loftier $773 – leaving many to wonder if it will be one of the next stocks to split.
Microsoft nears a $4 trillion market cap
Microsoft, meanwhile, forecast higher-than-expected capital expenditures of more than $30 billion for its fiscal first quarter. The company also said fiscal fourth-quarter revenue was up 18% year over year, while earnings per share grew 24%.
This was due in part to a 34% jump in revenue for Microsoft's Azure AI cloud-computing platform and a 26% rise in total revenue for its Intelligence Cloud segment.
"This was a watershed quarter for Redmond and we are raising our price target to $625 from $600, reflecting the eye-popping cloud and AI strength," says Wedbush analyst Dan Ives. This represents implied upside of more than 17% to today's close.
"It remains clear," Ives says, that fiscal 2026 "remains the true inflection year of AI growth for Microsoft as CIO lines build for deployments behind the velvet ropes in Redmond with the company investing aggressively to capture this opportunity over the coming years."
MSFT stock sailed 4% higher and came close to joining Nvidia (NVDA) in the $4 trillion market-cap club.
Thanks to the strength of these mega-cap stocks, the Nasdaq Composite only lost 0.03% to 21,122. The S&P 500 fell 0.4% at 6,339, while the Dow Jones Industrial Average closed down 0.7% at 44,130.
Arm sinks 13% after earnings
While UnitedHealth Group (UNH, -6.2%) and Merck (MRK, -4.4%) were the worst Dow Jones stocks today, Invisalign maker Align Technology (ALGN, -36.6%) kept pressure on the S&P 500 after its second-quarter revenue miss.
Arm Holdings (ARM) was also at the bottom of the S&P 500, plunging 13.4% after its second-quarter results. The chip developer reported in-line earnings, but it fell just shy of top-line expectations as soft demand for smartphones weighed on royalty revenue.
The company also said it expects second-quarter earnings of 33 cents per share at the midpoint, lower than the 35 cents per share analysts are calling for.
"While we view Arm's results as largely consistent with the prior quarter, investors will be disappointed by the lack of upside," says William Blair analyst Sebastien Naji.
He adds that Arm's post-earnings pullback should be seen as "a buying opportunity for a core semi asset that is at the heart of a large swath of modern compute."
Naji has an Outperform (Buy) rating on Arm, and he's not alone. Of the 39 analysts covering the tech stock who are tracked by S&P Global Market Intelligence, 16 say it's a Strong Buy, six have it at Buy, 13 call it a Hold and four have it at Sell or Strong Sell. This works out to a consensus Buy recommendation.
The busy week's not over yet
Between the earnings calendar, the economic calendar, and a blowout IPO for software company Figma (FIG), market participants have had plenty to sift through this week – and there's still more on the docket.
In addition to quarterly results from Apple (AAPL) and Amazon.com (AMZN) – due out after tonight's close – tomorrow morning will bring the release of the July jobs report.
Investors are also keeping a close eye on tariff news. For one, August 1 marks the Trump administration's deadline to secure trade deals with most countries, though the White House said earlier that the president will sign an executive order this afternoon or evening that will set tariff rates.
China has a separate deadline of August 12, while earlier today, Trump announced a 90-day extension for Mexico.
Related content
- How to Invest for a Fall Interest Rate Cut by the Fed
- The 10 Best Tech Stocks of All Time
- Despite Tariffs, These Investment Experts Are Bullish on European Equities
-
Tech Sells Off While Trump Stirs the Fed: Stock Market TodayWe've reached another important part of earnings season, though markets remain captivated by the president, the Fed, and interest rate policy.
-
We bought a vacation home for retirement, but we never use it. Should we sell, or rent it out and wait for mortgage rates to come down?We ask financial planning experts for advice.
-
Tech Sells Off While Trump Stirs the Fed: Stock Market Today
We've reached another important part of earnings season, though markets remain captivated by the president, the Fed, and interest rate policy.
-
A Financial Professional's Take on Long-Term Care Insurance: Buy or Not?Unless you have about $6,000 burning a hole in your pocket every month, you should make a plan in case you need long-term care. Luckily, you have options.
-
How to Unearth Sustainable Investment in Mining: A Financial Professional's GuideMining is likely to play a critical role in the global transition to more environmentally friendly energy resources. Here's how you can balance the opportunities and the risks.
-
Dow Retreats From a Record High: Stock Market TodayQuietly rising since April, Home Depot stock was conspicuously constructive Tuesday as high-profile tech names dragged equity indexes down.
-
Don't Be a Sucker: The Truth About Guarantor and Cosigner AgreementsThere are significant financial and relationship risks involved if you agree to be a cosigner or guarantor. Make sure you perform your due diligence, and know exactly what you're getting into, before agreeing to such a commitment.
-
The Hidden Risk Lurking in Most Retirement Plans: Human BehaviorWhat's one of the differences between a good financial adviser and a great one? The ability to use behavioral coaching to guide clients away from emotional decision-making and toward retirement success.
-
Addressing Your Clients' Emotional Side: Communication Techniques for Financial AdvisersRather than focusing only on financial plans, you can better serve your clients — and grow your business — by learning what to say and do when a client gets anxious or emotional.
-
Stocks Struggle Ahead of Busy Fed Week: Stock Market TodayThe minutes from the July Fed meeting will be released Wednesday, while Chair Powell will deliver a key speech at Jackson Hole on Friday.
