Meta loses eight percent in a day while Microsoft gains 15 percent

Meta Platforms lost eight percent in a single trading day at the end of July. Microsoft gained 15 percent on the same day. Both groups had presented their quarterly figures and their investment plans shortly before.

The difference does not lie in the results but in how the spending is judged. Meta has raised its investment guidance for 2026 twice and now stands at 125 to 145 billion dollars. In 2025 it was about 72 billion dollars.

The budget has therefore almost doubled within a year. According to industry estimates around 75 percent of the spending by the large technology groups goes to projects in artificial intelligence.

The short version

• Meta lost eight percent in a single trading day at the end of July, while Microsoft gained 15 percent on the same day.
• Investment guidance for 2026 was raised twice and now stands at 125 to 145 billion dollars, after about 72 billion in 2025.
• Meta counts among analysts as the most cheaply valued of the very large technology stocks, and Wedbush named a price target of 920 dollars.

Raised budgets no longer count as good news

A few quarters ago such increases were read as evidence of healthy demand. That has since turned around.

Alphabet also lost seven percent after raising its guidance. According to a tally by CNBC the large technology groups lost almost one trillion dollars in market value following their reports.

Together Amazon, Alphabet, Microsoft, Meta and Oracle signal investment of 775 to 800 billion dollars for 2026. That is about three times what these five companies spent in 2024.

Analysts expect the one trillion dollar mark to be passed in 2027. The bottleneck is regarded as not the money but the available electrical capacity and the delivery times.

The cheapest of the very large stocks

Despite the share price loss Meta counts among analysts as the most cheaply valued of the very large technology stocks.

Scott Devitt of Wedbush named a price target of 920 dollars per share. That would correspond to a valuation of around 2.3 trillion dollars.

For comparison, only Nvidia, Apple, Alphabet and Microsoft have so far reached the three trillion dollar mark.

A decision from Bonn helps the advertising business

One piece of news from Germany is directly relevant to Meta but concerns a different company.

Apple has to rework its consent procedure for tracking user behaviour. Following a decision by the German competition authority, the applications made by Apple itself received more favourable prompts than those of outside developers. Apple has four months to put neutral wording and design changes in place across almost every country of the European Union. The commitments run for seven years.

For Meta that is a relief. Simpler consent improves access to the data used for targeted advertising. The group had described the original introduction of that prompt in 2021 as a serious intrusion into its business model.

Whether consent rates actually change will only show after the rollout.

Meta invented the financing model

A method that now shapes the whole sector goes back to Meta. The group introduced the model of residual value guarantees for data centres.

Under it a company backstops certain leasing obligations without carrying the debt on its own balance sheet. Filings by Meta state that payments under such guarantees are not probable, which is why no liability was booked.

Broadcom carried the principle over to chip financing. Bank of America estimates that the financing vehicle there could carry senior debt of 370 billion dollars by the middle of 2029. Nvidia uses a similar model and has since capped its backstop at up to 25 percent per project.

Frequently asked questions

Why do investors react badly to higher budgets

A few quarters ago such increases were read as evidence of healthy demand. That has since turned around. Alphabet also lost seven percent after raising its guidance. According to a tally by CNBC the large technology groups lost almost one trillion dollars in market value following their reports.

What does the decision from Bonn mean for Meta

Apple has to rework its consent procedure for tracking user behaviour. For Meta that is a relief, because simpler consent improves access to the data used for targeted advertising.

What are residual value guarantees for data centres

Under them a company backstops certain leasing obligations without carrying the debt on its own balance sheet. Meta introduced the model, Broadcom carried it over to chip financing, and Nvidia uses a similar model with a cap of up to 25 percent per project.

This analysis is for information only and is not investment advice.