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The Zacks Analyst Blog Highlights Meta Platforms and Microsoft
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For Immediate Release
Chicago, IL – May 16, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Meta Platforms (META - Free Report) and Microsoft (MSFT - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
META vs. MSFT: Which AI Superpower Is a Better Buy?
Meta Platformsand Microsoft have evolved as artificial intelligence (AI) powerhouses with significant investments in developing AI infrastructure and applications. While Meta Platform plans to invest between $64 billion and $72 billion, driven by Generative AI and core business needs, Microsoft expects capital expenditures to increase in the coming years to support growth in its cloud offerings and investments in AI infrastructure and training. Microsoft’s investment in Open AI has been a catalyst in driving the adoption of Generative AI.
According to IDC, the global AI infrastructure market is expected to surpass $200 billion in spending by 2028. AI adoption is expected to grow exponentially as hyperscalers, cloud service providers, private companies and federal governments plan to deploy and leverage AI. The massive opportunity bodes well for both Meta Platforms and Microsoft.
So, META or MSFT, which is a stronger pick now?
The Case for Meta Platforms Stock
Meta Platforms focus on improving advertisers’ return on ad spending is a key catalyst. Its proprietary machine learning system, Andromeda, for retrieval in ad recommendation is powered by NVIDIA. AI is helping META better at targeting and finding the right audience for advertisers.
The launch of the new Generative Ads Recommendation model for ads ranking that is being used in Facebook Reels has increased conversion rates by 5%. Meta Platforms also saw 30% more advertisers using AI creative tools. Improvements in META’s recommendation system have led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and a 35% increase on Threads over the past six months.
Meta Platforms’ focus on making Meta AI the leading personal AI with a deepening emphasis on personalization, voice conversations, and entertainment is a key catalyst. The launch of Meta AI’s standalone app is a noteworthy development in this regard. Growing sales of Ray-Ban Meta AI glasses as well as Quest is noteworthy for META’s prospects.
The Case for Microsoft Stock
Microsoft is benefiting from its strategy of infusing AI in its applications. The company has more than 60,000 Azure AI customers, up nearly 60% year over year. The Azure AI Foundry application and agent development hub has now been adopted by developers at more than 70,000 enterprises and digital-native companies.
Microsoft's Azure AI Agent Service has been utilized by more than 10,000 organizations to build, deploy and scale agents. The company's Phi small language models have gained significant traction, with 38 million downloads to date. In the development space, GitHub Copilot's code review agent has handled more than eight million requests, while GitHub Copilot itself has surpassed 15 million users, representing more than fourfold growth year over year.
Microsoft 365 Copilot continues to expand its global footprint with hundreds of thousands of customers worldwide and usage is increasing threefold compared to the previous year. Microsoft Copilot has proven instrumental in enhancing employee productivity and creativity, with data from the Work Trend Index research showcasing potential time savings of up to 10 hours per month.
Microsoft is now extending Copilot’s capabilities across its entire product spectrum, including Windows, Microsoft 365, Microsoft Teams and Edge. The adoption of Copilot Studio has been particularly strong, with more than 230,000 organizations, including 90% of the Fortune 500, implementing the technology.
META Shares Outperform MSFT
Meta Platforms shares have outperformed Microsoft year to date. While META shares appreciated 12.5% Microsoft returned 7.5%. However, higher tariff announced on Liberation Day has negatively impacted Meta Platforms shares as compared with Microsoft. Since April 2, Microsoft shares have appreciated 18.6% while Meta Platforms returned 12.8%.
META & MSFT’s Earnings Estimate Revisions Positive
The Zacks Consensus Estimate for META’s 2025 earnings is pegged at $25.52 per share, up by 2.7% over the past 30 days, indicating a 6.96% increase over fiscal 2024’s reported figure.
The consensus mark for Microsoft’s fiscal 2025 earnings has increased 2% to $13.30 per share over the past 30 days, suggesting 12.71% growth over 2024.
Both META’s and MSFT’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. Meta Platforms’ average surprise of 17.3% is better than Microsoft’s surprise of 5.21%, reflecting good quality of earnings beat on a consistent basis.
Valuation: META is Cheaper Than MSFT
Both Meta Platforms and Microsoft are overvalued, as suggested by the Value Score of D.
In terms of forward 12-month Price/Sales, Meta Platforms shares are trading at 8.57X, lower than Microsoft’s 10.9X.
Conclusion
Although both Microsoft and Meta Platforms are leveraging AI to boost their prospects Microsoft is better positioned compared with META given strong adoption of Copilot, Azure AI services and a rise in AI Copilot business.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Meta Platforms and Microsoft
For Immediate Release
Chicago, IL – May 16, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Meta Platforms (META - Free Report) and Microsoft (MSFT - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
META vs. MSFT: Which AI Superpower Is a Better Buy?
Meta Platformsand Microsoft have evolved as artificial intelligence (AI) powerhouses with significant investments in developing AI infrastructure and applications. While Meta Platform plans to invest between $64 billion and $72 billion, driven by Generative AI and core business needs, Microsoft expects capital expenditures to increase in the coming years to support growth in its cloud offerings and investments in AI infrastructure and training. Microsoft’s investment in Open AI has been a catalyst in driving the adoption of Generative AI.
According to IDC, the global AI infrastructure market is expected to surpass $200 billion in spending by 2028. AI adoption is expected to grow exponentially as hyperscalers, cloud service providers, private companies and federal governments plan to deploy and leverage AI. The massive opportunity bodes well for both Meta Platforms and Microsoft.
So, META or MSFT, which is a stronger pick now?
The Case for Meta Platforms Stock
Meta Platforms focus on improving advertisers’ return on ad spending is a key catalyst. Its proprietary machine learning system, Andromeda, for retrieval in ad recommendation is powered by NVIDIA. AI is helping META better at targeting and finding the right audience for advertisers.
The launch of the new Generative Ads Recommendation model for ads ranking that is being used in Facebook Reels has increased conversion rates by 5%. Meta Platforms also saw 30% more advertisers using AI creative tools. Improvements in META’s recommendation system have led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and a 35% increase on Threads over the past six months.
Meta Platforms’ focus on making Meta AI the leading personal AI with a deepening emphasis on personalization, voice conversations, and entertainment is a key catalyst. The launch of Meta AI’s standalone app is a noteworthy development in this regard. Growing sales of Ray-Ban Meta AI glasses as well as Quest is noteworthy for META’s prospects.
The Case for Microsoft Stock
Microsoft is benefiting from its strategy of infusing AI in its applications. The company has more than 60,000 Azure AI customers, up nearly 60% year over year. The Azure AI Foundry application and agent development hub has now been adopted by developers at more than 70,000 enterprises and digital-native companies.
Microsoft's Azure AI Agent Service has been utilized by more than 10,000 organizations to build, deploy and scale agents. The company's Phi small language models have gained significant traction, with 38 million downloads to date. In the development space, GitHub Copilot's code review agent has handled more than eight million requests, while GitHub Copilot itself has surpassed 15 million users, representing more than fourfold growth year over year.
Microsoft 365 Copilot continues to expand its global footprint with hundreds of thousands of customers worldwide and usage is increasing threefold compared to the previous year. Microsoft Copilot has proven instrumental in enhancing employee productivity and creativity, with data from the Work Trend Index research showcasing potential time savings of up to 10 hours per month.
Microsoft is now extending Copilot’s capabilities across its entire product spectrum, including Windows, Microsoft 365, Microsoft Teams and Edge. The adoption of Copilot Studio has been particularly strong, with more than 230,000 organizations, including 90% of the Fortune 500, implementing the technology.
META Shares Outperform MSFT
Meta Platforms shares have outperformed Microsoft year to date. While META shares appreciated 12.5% Microsoft returned 7.5%. However, higher tariff announced on Liberation Day has negatively impacted Meta Platforms shares as compared with Microsoft. Since April 2, Microsoft shares have appreciated 18.6% while Meta Platforms returned 12.8%.
META & MSFT’s Earnings Estimate Revisions Positive
The Zacks Consensus Estimate for META’s 2025 earnings is pegged at $25.52 per share, up by 2.7% over the past 30 days, indicating a 6.96% increase over fiscal 2024’s reported figure.
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
The consensus mark for Microsoft’s fiscal 2025 earnings has increased 2% to $13.30 per share over the past 30 days, suggesting 12.71% growth over 2024.
Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote
Both META’s and MSFT’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. Meta Platforms’ average surprise of 17.3% is better than Microsoft’s surprise of 5.21%, reflecting good quality of earnings beat on a consistent basis.
Valuation: META is Cheaper Than MSFT
Both Meta Platforms and Microsoft are overvalued, as suggested by the Value Score of D.
In terms of forward 12-month Price/Sales, Meta Platforms shares are trading at 8.57X, lower than Microsoft’s 10.9X.
Conclusion
Although both Microsoft and Meta Platforms are leveraging AI to boost their prospects Microsoft is better positioned compared with META given strong adoption of Copilot, Azure AI services and a rise in AI Copilot business.
Currently, Microsoft has a Zacks Rank #2 (Buy), making the stock a stronger pick compared with Meta Platforms, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.