Although much of the market’s focus last week was on president Donald Trump on the one hand, and Chinese AI start-up DeepSeek, on the other, there was also a slew of earnings reports which included a couple of Big Tech companies.

Facebook, Instagram and Whatsapp-owner Meta Platforms (META:NASDAQ) posted fourth-quarter revenue of $48.4 billion, up 21% on the previous year and well above analysts’ estimates of $47 billion thanks to growth in advertising receipts.

Earnings per share also crushed expectations with a rise of 50% to $8.02 compared with the consensus of $6.76, but the share price reaction was muted due to soft forward guidance.

Revenue for the first quarter is now seen up 12% at $39.5 billion, against a market forecast of $41.7 billion, while spending on AI (artificial intelligence) data centres is set to top $60 billion this year, up more than 50% on 2024.

According to thestreet.com, spending on AI projects by the big tech firms could reach $300 billion this year while estimates for overall spending on AI technology over the next three years has been pegged at around $2 trillion.

Like Meta, Microsoft (MSFT:NASDAQ), whose second-quarter results also beat the consensus with revenue of almost $70 billion and EPS of $3.23, saw its shares come under some pressure as analysts bemoaned a slower than anticipated growth outlook for its Azure cloud computing arm.

This was despite cloud revenue posting 21% year-on-year growth and surpassing $40 billion in quarterly revenue for the first time.

Analysts were also downbeat on the prospects for OpenAI, in which Microsoft owns a 49% stake, due to the entry of a low-cost, open-source competitor seemingly from out of nowhere.

In terms of the wider earnings picture, over a third of the companies in the S&P 500 index have now reported results for the final quarter of 2024, with 77% of companies beating forecasts, which is in line with the five-year average according to Factset.

However, the average ‘beat’ has only been 5% against the five-year average of 8.5% as positive results from technology and communication services companies – including Meta and Microsoft – have been partially offset by negative surprises from industrial companies, which have been more numerous and make a bigger contribution to the total.

As of the end of January, the blended earnings growth rate for the companies which have so far reported was 13.2% compared with 11.8% at the end of December.

If this rate is maintained it would mark the sixth consecutive quarter of growth for the index and the highest year-on-year growth rate since the fourth quarter of 2021.

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