The AI trade is coming to a realization: America’s best businesses are turning into utilities.Meta CEO Mark Zuckerberg in Sun Valley, Idaho, on July 9, 2026. (Photo: David Paul Morris/Bloomberg/Getty Images)

Such is the fate that befalls Meta, whose shares fell as much as 10% in after-hours trading Wednesday after the company missed earnings expectations, owing to costs ballooning 55%.

Its operating income fell 8%, net income dropped 14%, and it barely eked out $784 million of free cash flow—just narrowly missing falling into negative territory and well below the roughly $12 billion in free cash flow the company has averaged over the previous eight quarters.

Meta’s revenue in Q2 was up 28% from a year earlier, beating expectations, but operating income for Family of Apps, the segment containing Facebook, Instagram, WhatsApp and Messenger, fell to $23.4 billion from $25.0 billion.

In other words, its core business grew revenue but made less money doing it—and the money that the company is earning is immediately being used.

The reason why is the term investors have come to love to hate: capex. Capital expenditures are now up to $31.1 billion in the quarter, nearly double the amount spent a year earlier. The company spent almost every dollar its businesses could generate on AI infrastructure: servers, data centers, network infrastructure, and chips.

Meta now expects full-year capital expenditures of $130 billion to $145 billion, having raised the floor. It spent $50.9 billion in the first half. That leaves $39 billion to $47 billion a quarter for the rest of the year, against operating cash flow of roughly $32 billion. So it follows that this quarter was the last positive cash-flow quarter this year. —Eva Roytburg

Microsoft said Wednesday that its Azure cloud business surpassed $100 billion in revenue for its fiscal year 2026, giving its investors confidence even as the broader market plunged on worries over AI spending and U.S. inflation.

The annual gains for Azure—up 41% on last year’s $75 billion—helped cement Microsoft’s position as a leading cloud and AI infrastructure giant behind Amazon Web Services.

For the year, revenue came in at $331.8 billion. Earnings per share rose 32% to $17.95, though it was helped along by a $3.2 billion gain from Microsoft’s investment in Anthropic and nearly $5 billion in gains from its investment in OpenAI during the year.

Shares of Microsoft rose more than 8% in after-hours trading despite a broad market selloff.

For the fourth quarter, cloud growth increased 43% year over year, providing a boost to overall quarterly revenue of $90 billion, above analyst estimates of $87.7 billion.

Signed customer agreements that haven’t yet turned into revenue totaled $678 billion, up 84%.

On a call with investors, CEO Satya Nadella said Microsoft has seen a fivefold increase in customers using multiple AI providers. Azure now offers some 11,000 models.

Looking ahead, Microsoft estimated Q1 Azure growth at about 45% and Q1 capex exceeding $50 billion. CFO Amy Hood added that Microsoft planned to extend the “useful life” of the buildings housing its data centers from 15 to 25 years, reducing reported capex. —Amanda Gerut

DoorDash has officially launched a drone delivery effort dubbed DoorDash Air.

The launch coincides with the San Francisco company’s success in securing a U.S. Federal Aviation Administration certification (Part 135, if you’re curious) to operate commercial drone deliveries in the U.S., joining Alphabet (Wing), Amazon (Prime Air), UPS (Flight Forward), and four others.

Much like its ride-hailing peers, DoorDash is interested in reducing its reliance on human operators for certain (low margin) orders, cutting delivery times for mid-range orders, and expanding its network. 

The company currently partners with Wing and Flytrex in various metro areas.

“Drone delivery means consumers can have what they need when they need it most, whether that’s essentials like cold medicine or time-sensitive items like a coffee or hot meal to a nurse finishing a 12-hour shift,” DoorDash wrote in a blog post.

The drone delivery project—which includes the logistics system to determine what can successfully be carried by a drone—was developed by DoorDash Labs, the company’s autonomy and robotics division. The group also produced a ground delivery robot called Dot that can be found in a clutch of Phoenix suburbs (Tempe, Mesa, Gilbert, and Chandler) and in a portion of Fremont, California. —AN

—Russia charges Pavel Durov with facilitating terrorist activity. The nation alleges that Ukrainian spies used Telegram to organize attacks inside Russia.

—Thinking Machines Lab co-founder Lilian Weng will return to OpenAI, citing health concerns.

—Robinhood crypto revenue tops modest estimates amid a record quarter for revenue.

—X settles with the World Federation of Advertisers, ending its long-running legal spat over alleged brand boycotts.

—Big Tech’s hottest new hire? Electricians and carpenters to build all those AI data centers.

—Arm beats estimates. Q1 sales are up 22% from last year to $1.29 billion; Q2 revenue and profit estimates are sunnier than expected.

—The U.K.’s antitrust watchdog begins investigating Microsoft for allegedly misleading users into renewing Microsoft 365 subscriptions with Copilot at a higher price.

—Waymo is back on the freeway, starting in Phoenix, after a two-month suspension to improve performance.

—Qualcomm shares fall 7%. Q3 revenue falls, year over year, and a Q4 profit forecast comes in lower than Wall Street estimates.