Mag 7 Weekly: Microsoft's Azure Jump Buys Relief, Meta's Capex Floor Does Not
By The Numbers
- 43% - Microsoft Azure growth in fiscal Q4 (constant currency also 43%), up from 40% last quarter. Full-year Azure revenue cleared $100 billion for the first time
- $90.01 billion - Microsoft quarterly revenue vs $87.62 billion expected. Adjusted EPS $4.74. Shares jumped about 8% after hours after 2026 capex plans held steady
- $60.80 billion / $6.18 - Meta Q2 revenue (+28% YoY) and diluted EPS. Net income fell 14% to $15.85 billion. Full-year capex narrowed to $130B-$145B (lower end raised from $125B)
- -20.2% / -10.4% - Tesla and Nvidia weekly declines into the print window. Apple still leads the group at +24.8% YTD into its Thursday report
- $4.62 billion - Meta Reality Labs operating loss in Q2. Free cash flow compressed to $784 million after $31.08 billion of quarterly capex
The Mag 7 is not one trade. Wednesday night made that painfully clear.
Microsoft (MSFT) printed the demand number the market has been begging for. Azure growth accelerated to 43%. Revenue hit $90.01 billion against a $87.62 billion consensus. Adjusted EPS landed at $4.74. Most important for a stock still down about 17% year to date into the print: management left calendar 2026 capital spending plans unchanged and said the company should stay cash-flow positive in fiscal 2027. Shares ripped roughly 8% after hours.
Meta Platforms (META) told a different story on the same day. Revenue of $60.80 billion rose 28%. That was not enough. Net income fell 14% to $15.85 billion. Diluted EPS dropped to $6.18 from $7.14 a year ago. Operating margin collapsed to 31% from 43%. Then finance raised the lower end of 2026 capex to $130 billion from $125 billion (range now $130B-$145B). The stock was already down 6.6% on the week into the report and sold off further after hours.
Same AI arms race. Two very different bills. Here is the full scoreboard.
The Scoreboard
Prices and weekly moves as of the July 29 regular close (pre after-hours reaction on MSFT and META). Apple and Amazon report after the Thursday close.
| Stock | YTD | Past Month | Key Catalyst This Week |
|---|
| AAPL | +24.8% | +20.0% | YTD leader; Thursday earnings next |
| GOOGL | +6.8% | -4.8% | Still digesting $195B-$205B capex guide |
| NVDA | +0.6% | -2.5% | -10.4% week; AI spend revolt spillover |
| AMZN | +0.1% | -5.6% | -7.4% week into Thursday print / $200B capex |
| META | -10.0% | +4.1% | Profit -14%; capex floor to $130B |
| MSFT | -17.4% | +6.0% | Azure 43%; rev beat; 2026 capex steady |
| TSLA | -31.9% | -27.6% | -20.2% week after EPS miss hangover |
Microsoft: Azure Proof, Spending Discipline
Microsoft finally got the tape to listen. Fiscal fourth-quarter revenue of $90.01 billion beat the $87.62 billion LSEG consensus and rose about 18% year over year. Net income hit $35.77 billion, or $4.81 a share, helped in part by a $3.2 billion mark on the Anthropic stake. Adjusted EPS printed $4.74 against expectations near $4.24.
The cloud line is what mattered. Intelligent Cloud revenue reached $39.31 billion, up 31.6% and ahead of the Street. Azure growth accelerated to 43% (also 43% in constant currency), up from 40% last quarter. Full-year Azure revenue topped $100 billion for the first time. CFO Amy Hood guided fiscal first-quarter Azure growth at 45% constant currency, above the roughly 41% consensus.
Hold on. Let me stop here. Capex and finance leases still jumped 69% to $41 billion in the quarter. Nobody is pretending the buildout is cheap. The relief valve was guidance: calendar 2026 capital spending plans held steady, fiscal 2027 should stay cash-flow positive, and Hood talked about lengthening building useful lives in a way that trims the depreciation bite. After weeks of punishing every open-ended AI bill, the market treated "we're still spending, but the 2026 envelope is not blowing out tonight" as a permission slip. An 8% after-hours pop on a name still deep red year to date is the tell.
Meta: Revenue Fine, Profit and Capex Not
Meta's top line still looks like a growth company. Revenue of $60.80 billion rose 28%. Family daily active people hit 3.60 billion (+3%). Ad impressions rose 14%. Average price per ad rose 12%. Family of Apps operating income was $23.39 billion.
The P&L is where the revolt lives. Costs and expenses surged 55% to $42.03 billion, including $2.40 billion in legal charges and $1.18 billion of severance from the May headcount cut. Operating income fell 8% to $18.78 billion. Operating margin sank from 43% to 31%. Net income dropped 14% to $15.85 billion. Diluted EPS fell 13% to $6.18. Reality Labs lost $4.62 billion in the quarter. Capex ran $31.08 billion. Free cash flow compressed to $784 million.
Then came the guide. Full-year 2026 capital expenditures are now $130 billion to $145 billion, with the lower end raised from $125 billion. Q3 revenue is pegged at $61 billion to $64 billion. Full-year expenses moved to $165 billion to $169 billion after the legal hit. It's kinda like watching a company grow ads fast enough to fund an AI lab and a metaverse hangover at the same time, then discovering investors only want the ad machine. Without a hyperscale cloud rental business to monetize the GPUs, Meta gets graded on cash conversion. This quarter failed that test.
"Azure can accelerate to 43% and the stock rips if the 2026 capex envelope holds. Meta can grow revenue 28% and still get punished if profit falls 14% and the spending floor moves up. Same AI boom. Different balance sheets."
The Rest of the Board
Tesla (TSLA) remains the wreck. Shares fell about 20% on the week to $298.32 and sit -31.9% year to date after last week's earnings hangover: adjusted EPS of $0.33 missed hard, free cash flow went negative, and the robotaxi/Optimus timeline stayed soft. Deutsche Bank cut its target to $420 from $465 while keeping a Buy. The market is done paying auto multiples for a robotics pitch without robotics cash flow.
Nvidia (NVDA) dropped 10.4% on the week to $190.01 even as customers printed huge cloud numbers. That is the spillover trade. When investors revolt against the buyers of GPUs, the seller gets hit too until the next clean demand print. Nvidia still sits slightly green year to date at +0.6%. It does not report until late August.
Apple (AAPL) closed at $338.19, +3.8% on the week and still the clear Mag 7 leader at +24.8% YTD and +20% over the past month. Thursday's fiscal Q3 print is the next stress test. Consensus has been hunting roughly high-$1.80s EPS. Options have been pricing a fatter move than usual. Soft Services or iPhone color is the only clean way to knock the relative-strength crown off.
Amazon (AMZN) slid 7.4% on the week to $226.65 and is basically flat year to date into its own Thursday report. The Street is already bracing for another look at the ~$200 billion 2026 capex frame and whether AWS growth still justifies it after Google's sticker-shock week and Meta's margin crush.
Alphabet (GOOGL) eased 1.6% on the week to $336.71 after last week's cloud-proof, capex-panic split (Cloud +82%, 2026 capex guided as high as $205 billion). It remains +6.8% YTD and is now the control sample: demand is real, and the multiple still compresses when the bill jumps.
Bottom Line
What separates the winners from the laggards this week is not AI exposure. Everyone has AI exposure. It is whether management can show demand and a spending envelope the market will underwrite. Microsoft did both on Wednesday night. Meta showed demand and a higher floor on spend while profit fell double digits. Tesla is still paying for promising the future with present-tense cash burn. Nvidia is collateral damage until the buyers of its chips stop getting punished.
You don't have to trust me. Trust the numbers. Apple is still +25% YTD with the cleanest chart into its print. Microsoft just got a second look after a brutal year-to-date drawdown. Meta, Amazon, and Tesla are trading like balance-sheet stories first and product stories second. Google already taught the class last week: 82% cloud growth does not immunize a $205 billion capex ceiling.
Thursday belongs to Apple and Amazon. If Apple keeps the defensive premium and Amazon can sound more like Microsoft than Meta on the capex calendar, the group can stabilize. If both lean into "growth now, cash later," the Mag 7 keeps trading as seven different stocks, not one mega-trade.
P.S. When Azure hits 43% and the stock rips while Meta grows 28% and still sells off, the market is not quitting on AI. It is underwriting the bill.
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