ZACKS·2026-01-31 01:12Core Insights - The market reacted positively to Meta Platforms' quarterly results, while Microsoft and Tesla's December-quarter numbers disappointed investors [1] Group 1: Company Performance - Microsoft reported a +28.1% earnings growth and +16.7% revenue growth, exceeding estimates, but faced concerns over Azure's +38% revenue growth and underwhelming guidance [2][3] - Meta's Q4 earnings and revenues increased by +9.3% and +23.8%, respectively, but highlighted margin pressures; however, its effective use of AI in advertising improved click rates by +3.5% and conversion rates by +1% [4] - Meta plans to increase its capital expenditure to $135 billion for the year, up from $72 billion in 2025 and $39 billion in 2024, citing capacity constraints as a reason for the increase [5] Group 2: Market Trends - The Mag 7 group, which includes major tech companies, is projected to see Q4 earnings up +21.9% year-over-year with +18.1% higher revenues, although individual contributions vary significantly [7] - As of now, 167 S&P 500 members have reported Q4 results, showing a +13.1% increase in earnings year-over-year on +7.6% higher revenues, with 77.8% beating EPS estimates [9][19] - The Mag 7 group is expected to account for 25.2% of all S&P 500 earnings in 2025, up from 23.2% in 2024 and 18.3% in 2023, indicating a strengthening earnings outlook [14]