Wedbush Securities analyst Dan Ives expects Meta Platforms Inc. META and Microsoft Corp. MSFT to stand firm on their ambitious artificial intelligence spending plans during their upcoming earnings calls, despite recent market jitters over Chinese AI startup DeepSeek‘s emergence.
What Happened: Ives, writing on X on Tuesday, said he anticipates both tech giants to reiterate their substantial 2025 AI-driven capital expenditure targets – $60-65 billion for Meta and $80 billion for Microsoft – during their Wednesday earnings calls.
The analyst’s comments come as both companies prepare to report quarterly results amid market uncertainty triggered by DeepSeek’s surprise announcement of a new large language model that reportedly cost just $6 million to develop using restricted Nvidia Corp. NVDA chips.
While DeepSeek’s achievement sent tremors through tech stocks, On Monday, Ives dismissed concerns about its impact on established players. “No US Global 2000 is going to use a Chinese start-up DeepSeek to launch their AI infrastructure and use cases,” he noted, characterizing the recent market reaction as a “golden buying opportunity.”
See Also: Bill Ackman Questions Whether DeepSeek AI’s Hedge Fund Affiliate Profited From Nvidia’s Sell-Off: ‘A Fortune Could Have Been Made’
Why It Matters: For Meta’s upcoming report, analysts expect robust advertising momentum to drive revenue growth. Goldman Sachs analyst Eric Sheridan projects “above-industry topline growth over the next several quarters,” citing strong ad performance and untapped potential in platforms like WhatsApp and Messenger.
Microsoft investors will focus on Azure’s cloud computing performance, with analysts projecting 31-32% revenue growth. Oppenheimer analyst Timothy Horan, however, cautioned that the Street might be “too optimistic” about near-term returns on AI investments.
The broader AI landscape continues to evolve rapidly, with both companies heavily invested in the sector. “The focus of AI right now is the enterprise use cases and broader infrastructure propelling this $2 trillion of Cap-Ex over the next 3 years,” Ives emphasized, highlighting the strategic importance of maintaining planned investment levels despite market volatility.
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