$META and $MSFT are cutting internal Claude use
$META and $MSFT are cutting internal Claude use as AI bills climb with Microsoft slashing per employee budgets from $100K to $10K a month and Meta pushing Muse Code even as Claude spend stays massive. More companies are going to start treating tokens like a real budget which keeps AI usage growing but puts a lot more pressure on OpenAI and Anthropic pricing. Source: Shay Boloor @StockSavvyShay
Earnings are out: $MSFT +8pct after-hours, $META -8pct after-hours
Microsoft beat on the top line and saw a gain from its Anthropic stake. The software company’s Azure cloud business now exceeds $100 billion. Customers other than large model builders helped to expand Microsoft’s backlog. Meta shares dropped after the company reported second-quarter earnings that missed on earnings per share. The company’s revenue forecast also came in light. Meta narrowed its guidance for capital expenditures, keeping the top end of the range. Source: Stocktwits
AI ECONOMICS: The bill for “tokenmaxxing” just came due.
Meta’s employees ran up a staggering internal AI bill in a single month. The number is reshaping how Big Tech thinks about the cost of intelligence.
At the high end of its capex forecast ($135BN), META free cash flow in 2026 will be $0
Source: zerohedge
💥 Meta is building a $27 BILLION data center in Louisiana…
👉 But none of it shows up on Meta’s balance sheet. How? Meta shifted the entire project into a joint venture: 🔹 Meta owns 20% 🔹 Blue Owl Capital owns 80% 🔹 A holding company (Beignet Investor) issued $27.3B in bonds, mostly bought by Pimco 🔹 Meta will rent the data center starting in 2029 And here’s the kicker: the lease is structured to qualify as an operating lease, not a finance lease — letting Meta avoid listing the giant asset and the massive debt. But peel back the layers and things get messy: 🔥 Meta runs the data center 🔥 Meta carries the risk of cost overruns 🔥 Meta guarantees the full value of the bonds if they don’t renew 🔥 Yet Meta insists it doesn’t “control” the venture enough to count it on the books Even the Wall Street Journal called it “artificial accounting.” 🧩 It’s part of a bigger trend: Tech giants want unlimited AI infrastructure… 🚫 …but they don’t want the debt that comes with it. Morgan Stanley estimates the industry could need $800B in off-balance-sheet financing by 2028. Meta may not be borrowing on paper — but economically, this is debt with extra steps. What do you think: smart financial engineering or a red flag in disguise? Source: Hedgie
The market’s view has shifted dramatically.
Back in June, Alphabet and Meta were seen as roughly on par, w/only ~$200bn separating them in market value. Just 4 months later, the picture looks completely different – the gap has exploded to nearly $1.8tn. GOOG is now 2x the market cap of META. (HT Goldman) Source: Holger Zschaepitz @Schuldensuehner
Social media giant Meta (META) reported its first quarter results after the bell on Wednesday, beating on the top and bottom lines.
But the company also raised its full-year capital expenditure estimates to between $64 billion to $72 billion, up from $60 billion to $65 billion. Despite fears of an advertising slowdown amid tariff uncertainty, Meta says it anticipates Q2 revenue of between $42.5 billion and $45.5 billion, ahead of Wall Street's expectations of $44 billion. $META Meta Q1 FY25: 👨👩👧👦 Daily active people +6% Y/Y to 3.43B. 👀 Ad impressions +5% Y/Y. • Revenue +16% Y/Y to $42.3B ($1.0B beat). • Operating margin 41% (+4pp Y/Y). • EPS $6.43 ($1.21 beat). • FY25 Capex: $64-$72B (prev. $60-$65B).
Meta's Record Run
The shares are coming off a rally of 16 straight sessions, the longest streak of any current Nasdaq 100 Index company going back to 1990. The stock added more than 17% over the surge, bringing its market capitalization above $1.8 trillion. source : bloomberg
