The News
Meta, Tesla, and Microsoft all reported their latest quarter earnings Wednesday, with results showing a mixed bag for some of the biggest tech names.
Microsoft reported a 12% rise for the quarter, year on year — about $69.63 billion — above the expected $68.78 billion figure. Meta’s performance beat analysts predictions, generating $48.39 billion last quarter against the $47.04 billion prediction.
Elon Musk’s electric vehicle company Tesla, meanwhile, largely missed expectations on earnings and revenue, reporting $25.71 billion in quarterly revenue — or an 8% year-on-year dip— compared to the $27.26 billion analyst estimate.
The results came as tech stocks continued to feel the effect of the sudden prominence of Chinese AI firm DeepSeek. The startup’s model — which it said is as advanced as OpenAI’s ChatGPT but cost far less — has raised concerns on Wall Street over how much capital is spent on AI development.
Know More
Investors were particularly excited about Meta’s forecasts given its healthy online advertising growth and the advancement of Instagram Reels, which many analysts believe has gained momentum as an alternative to TikTok should the Chinese app be permanently kicked off US app stores.
“Bigger picture, we believe Meta’s product super-cycle can deliver multiple vectors of growth as its investments in CapEx further deepens its product moat,” wrote one Citi analyst.
Investors, meanwhile, were more bearish about Microsoft’s earnings, pointing to an overreliance on OpenAI — Microsoft’s stock slipped slightly in after hours trading Wednesday after it reported that its Azure cloud computer division grew more slowly than expected.
But it was Elon Musk’s Tesla that saw the biggest drop from 2023, underscoring the EV sector’s difficult environment as Chinese competition and pushback on green energy subsidies make the cars less affordable. The company’s stock has skyrocketed since Trump’s return to office — up 58% overall since his November victory — which many analysts attributed to Musk’s close relationship with the White House.
Tesla on Wednesday said it would focus on “significant investments in infrastructure” as it seeks to move past its 2024 decline in vehicle sales.