Good morning! Today we have everything to know about what’s already been a chaotic week of earnings for names ranging from tech to finance and social media.

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Wall Street is mixed on the AI spending-spree

The numbers on Big Tech companies’ balance sheets are so astronomical that any notion of “disappointment” seems absurd at this point. 

Naturally, Wall Street thinks otherwise. 

Both Meta and Microsoft — two of the biggest players in the AI arms race — reported strong quarterly earnings Wednesday evening.

Those numbers, however, weren’t enough to quell concerns around the companies’ AI spending plans for the coming quarters. 

Shares of each company tumbled more than 3% in overnight trading. 

Here’s the quarterly report card for Facebook parent:

• Earnings per share: $6.03, above estimates of $5.22

• Revenue: $40.6 billion, above estimates of $40.2 billion

And Microsoft’s:

• Earnings per share: $3.30, above estimates of $3.10

• Revenue: $65.6 billion, above estimates of $64.57

Meta said it’s positioning for a “significant acceleration” in spending related to new tech and infrastructure, which will drag on profits over the next year.

Susan Li, Meta’s chief financial officer, said the company expects full-year capital expenditures to hit $38 to $40 billion.  

Meanwhile, Microsoft’s strong cloud business and customer numbers came as its executives similarly cautioned of plenty of big spending ahead. 

“We are seeing AI drive a fundamental change in the business applications market as customers shift from legacy apps to AI first business processes,” said Microsoft CEO Satya Nadella.

As of Wednesday’s closing price, Meta has returned more than 70% year-to-date. Microsoft has gained a still-solid 16.6%, though that does lag the S&P 500.

Amazon and Apple will report earnings Thursday afternoon.

Odds are, both those companies will announce bets tied to AI, too.

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Elsewhere:

📊 The US economy keeps humming. Thanks to strong consumer spending, the first estimate for annualized third-quarter GDP came in at 2.8%, slightly cooler than expected. That’s below the 3% seen in the quarter prior, though most analysts remain upbeat. “The US economy appears to be doing just fine,” a Capital Economist economist said. (Yahoo Finance)

👀 Ray Dalio is concerned about the election. Speaking in Saudi Arabia, the billionaire told the Future Investment Initiative conference that the post-election landscape worries him for both candidates: “The debt is concerning, the internal conflict is concerning, the external conflict is concerning and certainly the climate and the cost of the climate is concerning.” (CNBC)

📈Crypto keeps climbing. Whether Harris or Trump take the White House, cryptocurrency looks like the winning asset heading into the next administration. Bitcoin is at all-time highs, token-based political contributions have topped $130 million this election cycle and the next batch of lawmakers will be the most crypto-friendly in history. (Barron’s)

Rapid-fire, earnings edition:

• Reddit stock soared 42% after securing its first profitable quarter in history (CNBC)

• Coinbase stock tumbled 4% as a tepid quarter of on-platform crypto trading led to weaker-than-expected quarterly earnings (Decrypt)

• Shares of Roku tumbled after the company shared a weak outlook for the upcoming quarter (Yahoo Finance)

• Starbucks missed analyst expectations on quarterly earnings and its new CEO promised to change its strategy (CNBC)

• MicroStrategy stock fell 10% after announcing in its earnings report plans to raise $42 billion of capital over the next three years so it can buy more bitcoin (CoinDesk)

• Robinhood stock tumbled 9% in after-hours trading after missing on revenue and profits for the third quarter (WSJ)

• Carvana easily beat earnings expectations and it raised its guidance for the year ahead (CNBC)

Election odds according to Kalshi, the biggest US prediction market:

Last thing:

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