WSJ What’s News - Meta Slips and Microsoft Soars on AI Earnings

Episode Date: July 30, 2026

A.M. Edition for July 30. Meta shares fall and Microsoft rallies after the hyperscalers sent very different signals on how they’re monetizing their massive AI outlays. Plus, as some people are allowed to return to their homes in southwestern France, WSJ’s Ed Ballard says a debate over aging water bombers and the country’s readiness ahead of a summer of wildfires is picking up. And DoorDash secures a key certification from the FAA to use drones for deliveries. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Meta slides and Microsoft rallies as investors look for answers on how hyperscalers are turning AI spending into AI revenue. Plus, we'll look at the extreme weather fueling Europe's wildfires and the aging planes being used to fight them. The problem is the scale, the number of fires, the intensity of fires. All of that has just exceeded the capacity of firefighting infrastructure. And as the U.S. strikes back on Iran, the Pentagon proposes spending big on resupplying Patriot missiles. It's Thursday, July 30th. I'm Lou Vargas for the Wall Street Journal. And here is the AM edition of What's News, the top headlines and business stories moving your world today. Investors are picking through earnings from META and Microsoft this morning and having their say on very different signals about how the companies plan to start making money from their AI buildouts. meta shares are down off hours as its AI spending plans and dwindling free cash flow overshadowed record second

quarter revenue. At the same time, Microsoft saw its shares jump after reporting strong cloud growth and big gains in paying AI subscribers. Well, here to recap how sentiment is shifting around those hyperscalers as we await results from two more later today is equity markets reporter Joe Stoner. Joe, let's talk about these companies in turn starting with meta, which is racing to catch up to its rivals in AI. And to do that is spending big on everything from snapping up chips to buying data centers to hiring more folks. And it seems like a real preoccupation for investors and all of this has been, what is this for exactly? Does the company have a plan to convert these investments into revenue? What are you seeing? Are markets satisfied with the

answers they got from Mark Zuckerberg and others? I think the feeling is they're not quite satisfied just yet, a word I heard from an analyst at Quilter this morning was vague listening to Mark Zuckerberg on his earnings call. Another analyst at XTB flagged to me that in their reality at Labs division, that's where they have kind of wearable AI. They lost $4.4 billion in the last quarter. It's not clear how that's going to turn into a profit. Yeah, let's actually let listeners hear how Zuckerberg himself described these competing impulses around AI. On one hand, maybe wanting to monetize investments now or on the other, you know, sit on these chips, sit on the compute, find a purpose for them down the line. Here he was. It's always a portfolio, right? It's not like, you don't want to

only do long-term things and you know, like, and not kind of prove the markets out that exist in the near term. But I also think it would be foolish to basically just sell the, all of the compute and take a short-term profit. Joe Meta stock soared almost 9% a month ago on reports that it might get into the business of selling off its X-Sex. AI computing power. And yet is the sense now that that's just not lucrative enough of a return on all of this investment? Yes, so there was a bit of amusement among analysts when those reports came out because on the one hand, meta isn't a chip reseller. It shouldn't be doing that as its main form of business. So as it kind of thinks through what it's going to do and whether it's

going to sell this computation, there's a bit of encouragement in Deutsche Bank analysts have said that meta is lagging behind its competitors. So if it thinks that it can make it. more money in the long term by keeping its computation in-house, that's a good sign. On the other hand, as you say, the stock market loved selling chips in the short term. The sugar rush of it all, right? You get some profits. Absolutely. And now matters on its longest losing streak ever as a stock. So it won't be the, as you say, sugar rush that investors were hoping for. Let's switch to Microsoft. It obviously helps that one of its core businesses is doing very well. That's Azure. It's cloud business. Revenue, it said, had surpassed $100 billion in that division.

for fiscal year 2026. That's on very strong 40 plus percent quarterly growth. But crucially, on the AI front, we got signs that it is succeeding in converting its massive user base into paying AI customers, saying co-pilot AI users who were paying for the service jumped by 10 million over the last quarter. Thanks in part to what chairman and CEO Satya Nadella said were some big new deals. Let's hear from him. NHS England, for example, is rolling out co-pilot to five, 105,000 clinicians and staff, the largest healthcare deployment of its kind after a trial showed its saved employees on average of 43 minutes per day. Joe, 500,000 seats there. That is the enterprise

AI marketplace that the Googles, the Anthropics, the open AIs of the world and others are competing in and maybe Microsoft showing it's able to hold its own there. Yeah, Microsoft seems to be doing what Matter can't, which is making money from its AI investments. And Alistek Quilter said to me this morning that its co-pilot is like a super app. It uses both anthropic technology and open AI technology. It's not a standalone entity. It owns the full AI stack. One important move that analysts have flagged is this expansion and its subscription base for co-pilot. And it's move away from a kind of seat-based model to one more to do with usage. That is a signal of how Microsoft might be able to fully monetize AI in the future.

Reporter Joe Stoner covers equity markets for the journal and Dow Jones NewsWires. Joe, thank you so much. Thank you, Luke. And we aren't done with hyperscaler earnings just yet. As Amazon and Apple report after the closing bell, our PM show will have top-line results later on, and we'll have any need-to-know analysis tomorrow morning. In more earnings updates, Samsung shares are rallying after the world's largest memory chip maker so that it expects a chip shortage to last through 2028, leading customers to continue seeking multi-year contracts. It's also seeing robust demand for its advanced AI chips with its core semiconductor division

posting a more than 200-fold increase in operating profit. Robin Hood has reported an almost 50% jump in its quarterly profits, even as revenue from crypto trading continued to slide. Instead, to top analyst estimates, the company wrote a number of tailwinds, including the demise of a decades-old day-trading rule, a blockbuster SpaceX IPO, and And his CEO, Vlad Tenev explained, increased wagering on event contracts, a trend he expected to continue. Football season, that's coming up. There's also the midterms, which I think are extremely important.

I mean, they're going to be a topic of discussion. And of course, customers are going to want to trade them and hedge their portfolios. Yeah, and there's events just on a consistent basis. Meanwhile, the other football helped to boost sales for ABE. InBev. The Budweiser Brewer reported a more than 1% increase in beer sales through June, with the World Cup boosting its Mickelope Ultra brand across the U.S. and Latin America. That continues a broader rebound that began earlier in the year, as the world's largest brewer started moving past a period of sliding demand.

Starbucks shares are up off hours after it beat revenue estimates for the quarter in the latest sign that CEO Brian Nickel is turning around the coffee cellar. And next up for the company, expanding delivery. a sales channel where customers spend more without, as Nicol predicted, leading to declines in in-store visits. Right now, there's no trade-off on margins, and we have yet to see any meaningful cannibalization from the delivery channel. So we're really excited about it, and pretty soon we'll have it also in our app. And speaking of direct-to-consumer, DoorDash says it has secured a key certification from the FAA to use drones for delivery. However, as WSJ Logistics and supply chain reporter, Liz Young, explains that could be the easy part as the company tries developing its own drones and backend systems and faces competition from the likes of Amazon and Walmart in the fast emerging aerial delivery market.

Over the past few years, it's gone from this niche experience to something that more and more companies talk about. I've heard, as I've talked to experts in this industry, that they see a lot of consumers who try this out, tend to order again. the drone delivery. But of course, right now, the rollout's been pretty sporadic. I'm sure most of the people listening to this have not had this in their neighborhoods. It's been pretty limited to very specific regions of the United States as these operators have had to deal with regulatory obstacles, community concerns about the buzzing overhead, for example, and also just limitations of these devices flying in rain or storms. DoorDash is set to report earnings next week after earlier this year posting double-digit jumps in revenue and or Coming up, the Pentagon aims to lock in missile supply, and the U.S. military hits back against Iran's surprise attack on troops in Jordan. We've got those stories and much more after the break. American forces struck Iran last night in what the military is calling a powerful response to Tehran's surprise missile attack on U.S. troops in Jordan earlier in the week.

That attack shattered a brief ceasefire after both sides had paused strikes on Friday in order to give negotiators a chance to secure the opening of the Strait of Hormuz. Meanwhile, the Pentagon is hoping to lock in the supply of Patriot missiles and increase shipbuilding capacity by earmarking more than $120 billion to help contractors boost production. That includes nearly $59 billion to Lockheed Martin for Patriots, which can take down crews and ballistic missiles, but cost around $120 billion to locket Martin for Patriots, which can take down crews and ballistic missiles, but cost around $4 million each and take years to produce. Replenishing munition stockpiles has been a pain point for the U.S. military, and the Trump administration was already planning to ramp up missile production before the war with Iran. Congress must still provide annual funding for the deals. Well, staying on Capitol Hill, a Senate Judiciary Committee vote that had been planned for today to advance President Trump's nomination of Todd Blanche as Attorney General to the Senate floor

has been called off. That says the administration tries to win over Senator John Cornyn of Texas and Tom Tillis of North Carolina. The two Republican holdouts want the Trump administration to permanently kill off a controversial $1.8 billion anti-weaponization fund, which was created in agreement with Trump to end his lawsuit against the IRS. And they're also asking for changes to an order from Blanche that ended pending tax audits against Trump and his businesses and appeared to provide sweeping protections against government investigations. Speaking to reporters, Trump said that he thought a vote on Blanche would be routine and suggested that Cornyn was upset at him for not endorsing him in a recent Senate primary in Texas, or

Cornyn was defeated by Trump's pick, Texas Attorney General Ken Paxton. And slightly cooler weather is coming as a relief to cruise battling fires that have swept across pockets of southern Europe in recent weeks, including in France, Spain, and Greece. Climate and energy reporter Ed Ballard says that a confluence of factors have set the stage for this summer's extreme weather. Western Europe's in a drought. And as the world gets hotter, Europe is increasingly enduring these long hot droughts that dry out the landscape. And the current one came after a very wet winter. Over the longer term, much of Europe is more wooded than it was a few decades ago, thanks in part to the depopulation of agricultural land, especially in Spain.

So you've had temperatures rising, droughts have been getting worse. And at the same time, there's been this steady accumulation of flammable. material that's waiting for a spark. And we've seen something called pyro-cumulonimbus clouds, which is essentially when a fire creates its own thunderstorm. And that is not a normal weather phenomenon in this part of the world. It says that the wildfires have been so intense, they've overwhelmed firefighters and the resources on hand. The problem is the scale, the number of fires, the intensity of fires. All of that has just exceeded the capacity of firefighting infrastructure, both in terms of the number of people to do the work, professionals

and volunteers, and the equipment they can use. My colleagues who are just to yesterday on a political argument that's developing in France over the country's limited number of water bombing planes, which are old and have frequently been grounded for maintenance. And Emmanuel Macron, the French president, has been criticized by his opponents for failing to replace them. And once these fires are finally been quenched, we can expect these debates to intensify, both over what kind of resources we need to invest in, whether Europeans need to change the way their land is managed, and also whether these disasters strengthen the case for cutting carbon emissions. In some other good news this morning, French authorities have given the go ahead for

more than 80,000 people who'd been forced to evacuate in southwestern France to return home. Temperatures that at peak there around 104 degrees Fahrenheit or 40 degrees Celsius are also set to drop today. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Daniel Bach, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with the news show. And until then, thanks for listening.