Logo

Bonus Episode: Tesla, Meta and Microsoft Earnings

en

January 29, 2025

TLDR: Discussion on Q2 2023 earnings of Big Tech companies: Tesla, Meta, and Microsoft, with input from Mandeep Singh (Bloomberg Intelligence), Caroline Hyde (Bloomberg Technology Co-Host) and Anurag Rana (Bloomberg Intelligence Senior Technology Analyst), by Carol Massar and Tim Stenovec.

1Ask AI

In the latest episode of Bloomberg's Business Week, hosts Carol Massar and Tim Stenovec discuss the recent earnings reports of major tech giants: Tesla, Meta, and Microsoft. Featuring insights from Bloomberg Intelligence analysts Mandeep Singh and Anurag Rana, as well as James Cakmak from Clockwise Capital, the episode dives into the implications of these financial results on the tech landscape.

Tesla's Earnings Overview

  • Earnings Performance: Tesla's stock faced a decline of about 2.7% after reporting adjusted EPS of 73 cents, missing the expectations of 75 cents per share.
  • Delivery Challenges: Despite achieving record deliveries in China, Tesla struggled to meet overall expectations and cited a lack of manufacturing efficiencies.
  • Market Competition: Tesla is facing intense price competition in China, leading to necessary cost reductions.
  • Future Expectations: Investors are waiting for the rollout of Tesla's Cybertruck, projected for 2026, which is a key part of their future strategy.

Microsoft's Earnings Insight

  • Impact of Cloud Business: Microsoft reported a nearly 4% drop in shares following its earnings report due to a slight miss in Azure revenue growth expectations. Analysts anticipated a growth rate of about 33-34%, but Microsoft delivered between 31-32%.
  • AI Integration: The analysts highlighted that while Azure continues to grow, the lower adoption rates for certain AI features (like 365 co-pilots) have raised concerns. The company’s infrastructure revenue remains strong with a $13 billion run rate and an impressive 175% growth rate.
  • Expectations vs. Reality: Despite strong commercial bookings, concerns over supply constraints were noted, impacting future growth visibility.

Major Takeaways on Microsoft

  • Price Competitiveness: The integration of AI tools across platforms is essential, with questions surrounding the sustainability of leadership in the AI sector as competition increases.
  • Investor Sentiment: Investors remain cautious, with analysts suggesting that expectations around the performance of AI products had been overly optimistic.
  • CAPEX Guidance: Microsoft continues to commit to a robust capital expenditure range of $60-65 billion, reflecting their focus on long-term growth despite short-term challenges.

Meta Platforms Earnings Discussion

  • Impressive Fourth Quarter: Meta's earnings exceeded expectations at $48.39 billion, stronger than the anticipated $46.98 billion. However, the guidance for the first quarter falls slightly short of the midpoint expectation.
  • Advertising Revenue: With $45.6 billion in revenue expected from advertising, it remains the cornerstone of Meta's business strategy. Analysts emphasized the importance of understanding advertising growth in comparison to Google’s revenue growth.
  • Reality Labs: Meta announced a larger operating loss for Reality Labs than expected, highlighting challenges in monetizing its metaverse investments while also growing its core advertising business.

Key Factors Influencing Meta's Future

  • Headwinds in Impressions Growth: With impressions growth at its lowest (6%), the firm’s advertising effectiveness remains a critical metric moving forward.
  • Regulatory Landscape: Meta cautioned investors about active regulatory scrutiny in the US and EU, which adds an element of unpredictability to their financial outlook.

Expert Analysis and Market Sentiment

  • Analysts pointed out that despite current stock fluctuations, fundamental dynamics in cloud computing and AI integration are crucial for Microsoft's future success.
  • For Meta, while advertising continues to be profitable, navigating the complexities of reality labs and addressing regulatory pressures will be critical.
  • The panelists underscored the significance of evolving consumer preferences in the AI landscape, particularly as names like Salesforce and OpenAI offer competitive products.

Conclusion

The discussions on Tesla, Meta, and Microsoft illustrate a landscape where emerging technologies, regulatory scrutiny, and competitive pressures converge. Investors need to stay informed about how these dynamics impact profitability and growth trajectories in the tech sector. As earnings season continues, companies must balance innovative spending with cost discipline, aiming to sustain growth amidst evolving market expectations.

Was this summary helpful?

Recent Episodes

Black Boxes Recovered from Plane Crash; Trump Barrels Toward Tariff Showdown

Black Boxes Recovered from Plane Crash; Trump Barrels Toward Tariff Showdown

Bloomberg Daybreak: US Edition

American Airlines DC aircraft collision results in no survivors; Trump sets course for tariff disputes with Canada, Mexico, and China; Apple's forecast brings cheer to investors amidst holiday results.

January 31, 2025

Bloomberg Bonus Episode: Apple and Intel Earnings

Bloomberg Bonus Episode: Apple and Intel Earnings

Bloomberg Daybreak: US Edition

Carol Massar and Tim Stenovec discuss Big Tech earnings of Apple and Intel, interviewing Jackie Davalos, Angelo Zino from CFRA Research and Caroline Hyde on Bloomberg.

January 30, 2025

Deadly Plane Crash Near DC Airport; Meta, Microsoft and Tesla Earnings

Deadly Plane Crash Near DC Airport; Meta, Microsoft and Tesla Earnings

Bloomberg Daybreak: US Edition

American Airlines plane collides with helicopter near DC airport; Meta shares gain due to positive AI comments from Mark Zuckerberg; Microsoft cloud growth limited by data center shortage.

January 30, 2025

Instant Reaction: Jay Powell on the Fed Decision

Instant Reaction: Jay Powell on the Fed Decision

Bloomberg Daybreak: US Edition

Fed Chair Jay Powell's remarks discussed on a special edition of Bloomberg Surveillance following the Federal Reserve's latest policy decision by hosts Tom Keene, Jonathan Ferro and Lisa Abramowicz.

January 29, 2025

AI

Ask this episodeAI Anything

Bloomberg Daybreak: US Edition

Hi! You're chatting with Bloomberg Daybreak: US Edition AI.

I can answer your questions from this episode and play episode clips relevant to your question.

You can ask a direct question or get started with below questions -

Sign In to save message history