Microsoft and Meta just revived the stock market's AI trade

• AI dominated the first-quarter earnings calls of Microsoft and Meta Platforms.
• Meta raised its 2025 capex guidance, signaling continued AI infrastructure growth.
• AI-related stocks surged Wednesday, with Nvidia, Arista Networks, Vistra, and Vertiv up big.

The stock market’s artificial intelligence trade got a fresh boost on Thursday after Microsoft and Meta Platforms hyped up the tech in first-quarter earnings call and committed to pushing ahead with massive investments in AI infrastructure.

Shares of AI-related stocks boomed Thursday morning, with Nvidia up as much as 5%, and other names including Arista Networks, Vistra, CoreWeave, and Vertiv also surging.

The jump in tech shares helped indexes rally after a mixed day on Wednesday, following a slate of weak economic data.

Here’s where major US indexes stood around 10:00 a.m. ET:

S&P 500: 5,625.28, up 1%

Dow Jones Industrial Average: 40,941.39, up 0.67% (+272.03 points)

Nasdaq Composite: 17,738.69, up 1.69%

Meta raised capex guidance for 2025 to $64 billion to $72 billion from $60 billion to $65 billion, though higher costs due to tariffs could be playing a role in the increased guidance.

The jump in capex plans suggests that the AI infrastructure buildout isn’t slowing down as had been feared in recent months following the release of the highly efficient DeepSeek model from a startup in China.

“We expect this significant infrastructure footprint we are building will not only help us meet the demands of our business in the near term, but also provide us an advantage in the quality and scale of AI services we can deliver,” Meta Platforms CFO Susan Li said on the company’s earnings call.

Wall Street analysts cheered the results. Bank of America reiterated its “Buy” rating for the stock on Thursday and raised its price target to $690 per share, a potential jump of 16% from Thursday’s intraday high.

Meanwhile, Microsoft spent the bulk of its earnings call talking about the important of AI and how it’s helping grow its business across the cloud and enterprise software.

“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Microsoft CEO Satya Nadella said.

Microsoft’s Azure cloud business posted year-over-year revenue growth of 33%, of which about 16% was attributed to AI.

“The company is still doubling down on the AI monetization strategy within cloud,” Wedbush analyst Dan Ives said in a note after Microsoft’s earnings.

Microsoft reiterated its guidance to spend $80 billion in capital expenditures this year.