British supermarket chain Asda has partnered Microsoft to expedite its move to a cloud-first operational model. Microsoft’s AI and machine learning technologies will support the cloud transition, with Microsoft Azure as the backbone of the retailer’s digital infrastructure. The move, described as one of the largest technology deals in the UK’s retail sector, builds on a commercial alliance dating back to 2022. It appoints Azure as the primary cloud provider of Asda and creates a joint investment fund ...

Core Insights - The market is characterized by a clear divergence in performance, driven by AI and large tech companies exceeding expectations, while laggards lack momentum [1][8] Group 1: Company Performance - Meta Platforms reported impressive earnings, with advertising revenue growth accelerating by 2 percentage points to 22% year-over-year, and strong momentum in core business metrics [1] - Microsoft's earnings report showcased stability in gross and operating margins despite significant capital expenditure increases, with a projected EPS of approximately $19.32 for fiscal year 2027 [2] - Adobe is viewed as an undervalued high-quality software company, with AI expected to support its growth vectors, despite current investor sentiment being relatively muted [6] Group 2: AI Impact - Meta attributed its strong advertising performance to AI, which improved the efficiency and revenue of its advertising system, leading to increased conversion rates on Instagram and Facebook [3] - The narrative around AI assistants is driving growth in the internet sector, with companies like Booking Holdings leveraging AI for personalized travel experiences [7] Group 3: Capital Expenditure Trends - Meta and Microsoft have significantly increased their capital expenditures, with Meta's 2026 capital expenditure raised by approximately $25 billion to $100 billion, and Microsoft's adjusted to about $116 billion for fiscal year 2026 [4] Group 4: Market Dynamics - The software industry shows mixed performance, with strong results from Microsoft and ServiceNow contrasted by disappointing results from Check Point and Confluent, indicating a challenging market environment [5] - The public cloud remains a major growth theme, with Microsoft's Azure service revenue growing by 4 percentage points to 39% year-over-year, amid ongoing capacity shortages [6] Group 5: Economic Indicators - Key economic data, including the Employment Cost Index (ECI) and PCE index, are set to be released, alongside ongoing earnings reports from major companies like Amazon and Apple [9]