New York, Jan 29, 2026, 14:01 EST — Regular session
- Microsoft tumbles roughly 12% as cloud growth and AI spending figures unsettle investors
- Meta jumps roughly 10% following an upbeat 2026 capex forecast and better-than-expected ad sales
- Traders are eyeing Apple’s earnings post-close and new developments in OpenAI funding talks
Microsoft dropped nearly 12% on Thursday, pulling down a broad group of AI-related stocks. Meta Platforms, on the other hand, surged around 10% after investors applauded its ad-driven earnings, even with a fresh wave of spending announced. Nvidia slipped about 0.6%, Amazon lost roughly 1.6%, and Apple remained mostly flat ahead of its earnings release after the close.
The mixed response highlights what Wall Street values right now: AI investment is accepted if it drives growth, but spending without clear returns faces swift backlash. “Investors are starting to look under the hood and see what’s really going on,” said Max Wasserman, co-founder and senior portfolio manager at Miramar Capital, as the Nasdaq dropped roughly 2% late in the morning. 1
Big Tech’s earnings this week boil down to one question: spend, but justify it. “The market appears to be questioning whether these massive capital expenditure hikes will generate sufficient returns,” said Jesse Cohen, a senior analyst at Investing.com. 2
Microsoft’s latest report wasn’t a complete miss, but some details hit the wrong notes. Azure revenue rose 39% in the fiscal second quarter, with a forecast of 37% to 38% growth for the next quarter. Yet capital expenditure soared to $37.5 billion, nearly 66% higher than last year, covering data centers and chips. Eric Clark, portfolio manager of the LOGO ETF, highlighted margin worries: “revenues are up 17% and the cost of revenues are up 19%.” 3
Meta went in the opposite direction. It raised its 2026 capital expenditure forecast to between $115 billion and $135 billion and reported a 24% jump in advertising revenue for the quarter ending Dec. 31. CEO Mark Zuckerberg told analysts to expect “a big year for delivering personal superintelligence.” 4
Adding to the chatter, The Information said Nvidia, Amazon and Microsoft are discussing a combined investment of up to $60 billion in OpenAI. The company is reportedly close to getting term sheets—those preliminary documents that spell out deal terms before contracts are signed. Reuters has not been able to confirm the report. 5
Nvidia, a key player in generative AI hardware, is keeping a close eye on China. CEO Jensen Huang revealed that the license for the company’s H200 chip in China is nearing approval. He expressed optimism that Chinese regulators will greenlight sales following his recent trip, during which he met with customers, partners, and officials. 6
A Reuters report on Wednesday revealed that Beijing has authorized ByteDance, Alibaba, and Tencent to purchase over 400,000 H200 chips collectively. However, these approvals carry conditions, and one source mentioned they remain too restrictive to finalize orders at this stage. The H200 chip reportedly delivers about six times the performance of Nvidia’s H20, according to the report. 7
Chip stocks reacted sharply to the latest news. Texas Instruments shares jumped roughly 8.5% on Wednesday, while the Philadelphia SE Semiconductor index climbed 1.7%. Investors are betting on a broader AI data-center demand surge that extends beyond just Nvidia’s high-end chips. Louise Dudley, a global equities portfolio manager at Federated Hermes, noted, “That confidence is feeding through to tech.” 8
ASML ramped up pressure on capacity in Europe, posting a record 13.2 billion euros in fourth-quarter orders. The Dutch chip-equipment giant also lifted its sales forecast for 2026. Still, analysts remain skeptical about its ability to keep pace with demand. CEO Christophe Fouquet responded bluntly to concerns about bottlenecks, saying, “this is not the case, certainly not this year.” 9
Thursday saw a pullback for several AI infrastructure stocks that surged last year. Oracle dipped roughly 4%, AMD lost close to 2%, CoreWeave dropped over 7%, and Nebius fell nearly 6%. Alphabet, however, remained mostly flat.
The risk for the group is clear: if cloud growth falters or customer demand turns uneven, hefty capex could tighten margins before new AI products start delivering returns. Add in stricter export rules or sudden changes in approvals for advanced chips to China, and forecasts could take a hit without much notice.
Traders are gearing up for Apple’s earnings report after Thursday’s close. Analysts are forecasting about a 13% boost in iPhone revenue for the holiday quarter. Investors will be eager for any insight into Apple’s AI plans, especially its move to integrate Google’s Gemini technology. Goldman Sachs analysts highlighted that this Google partnership “should demonstrate to the market” that the iPhone remains a crucial gateway for new AI tools. 10
