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Wall Street Reacts to Big Tech Earnings: Tesla, Microsoft Slip While Meta Surges

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Giuseppe Ciccomascolo
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Key Takeaways
  • Tesla’s core business underperformed in Q4, missing analyst expectations for both earnings and revenue.
  • Microsoft’s Q2 results were strong but fell short of expectations for Azure cloud growth.
  • Meta posted strong Q4 results, surpassing revenue and profit expectations with record numbers for both.

Tesla, Microsoft, and Meta reported mixed results, which impacted their stock prices. Investors’ eyes now turn to Apple’s earnings.

Tesla’s fourth-quarter performance  fell short of expectations despite gains from Bitcoin, while Microsoft faced slower Azure growth and a weak revenue outlook.

In contrast, Meta exceeded expectations with record revenue and profit, boosting investor confidence for 2025.

Tesla’s Missed Expectations

Despite the boost from Bitcoin, Tesla’s core business struggled in Q4, with results missing Wall Street expectations . The company posted adjusted earnings per share of 73 cents, below the anticipated 76 cents, and revenue of $25.71 billion, falling short of the expected $27.26 billion.

Revenue grew only 2% year-over-year, while automotive revenue dropped 8% to $19.8 billion, including $692 million from regulatory credits.

Tesla results
Tesla’s net income and adjusted EBITDA over time. | Credit: Tesla

Operating income fell 23% to $1.6 billion, largely due to lower prices across Tesla’s Model 3, Model Y, Model S, and Model X.

Net income dropped 71% to $2.32 billion, or 66 cents per share, compared to $7.93 billion a year ago, which had been boosted by a $5.9 billion one-time tax benefit.

Tesla reported 495,570 deliveries in Q4, bringing total deliveries for 2023 to around 1.8 million—marking the company’s first annual decline.

The stock  ended Wednesday’s ordinary trading session down by 2.3% to $389.10 per share but jumped by 4.1% to $405.23 during after-hours trading.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said, “Self-driving remains central to justifying Tesla’s lofty valuation, with the long-term bet resting on software-driven profits and autonomy.”

“Progress is ticking along with growing FSD availability, improving real-world performance, and the first Cybercab production still on the 2026 roadmap.”

“Meanwhile, the low-cost model is crucial for delivering growth in what’s shaping up to be a tough EV market next year, and investors will take comfort in Tesla sticking to a first-half 2025 timeline,” he added.

Microsoft Guidance Disappoints

Microsoft shares  dropped by 4.6% in after-hours trading on Wednesday following its fiscal second-quarter results, which revealed slower-than-expected growth in Azure cloud services and a weaker-than-forecast revenue outlook.

The company reported earnings per share  of $3.23, beating the expected $3.11 and revenue of $69.63 billion, surpassing the $68.78 billion forecast.

However, for the third quarter, Microsoft projected revenue  between $67.7 billion and $68.7 billion, below the consensus of $69.78 billion.

Microsoft stock price performance
Microsoft stock decreased after the company didn’t provide guidance. | Credit: Yahoo! Finance

The company’s fiscal Q2 revenue grew 12.3% year-over-year, its slowest growth since mid-2023. Azure‘s growth slowed to 31%, missing analyst expectations.

Microsoft also reported $2.3 billion in “other expenses,” partly due to a loss from its investment in Cruise.

Despite these challenges, Microsoft continues to expand its AI initiatives, including a $750 million investment in OpenAI and new AI partnerships.

Jacob Falkencrone, Chief Investment Strategist for Europe at Saxo Bank, told CCN: “For Microsoft, the biggest question is whether it can scale its cloud capacity quickly enough to meet soaring AI demand.”

“The company is already spending billions to expand infrastructure, but any further delays in cloud capacity could continue to limit Azure’s growth and hurt investor confidence,” he added.

Meta Stock Increases After Results

Meta exceeded expectations  in the fourth quarter of 2024, achieving record revenue and net profit as the parent company of Facebook and Instagram capped off a strong year.

The impressive results come as Meta anticipates a significant boost in AI-driven capital spending in 2025 and CEO Mark Zuckerberg  works to mend relations with former critic President Trump.

The company reported fourth-quarter revenue  of $48.39 billion, a 21% increase, and net income of $20.84 billion, up by 49%, or $8.02 per share. Analysts had predicted $46.99 billion in revenue and $6.76 in earnings per share.

Meta results
Meta posted strong results that pushed the company stock. | Credit: Meta Platforms

While Meta did not provide full-year revenue guidance for 2025, it expressed confidence that investments in its core business will drive strong growth throughout the year.

For the first quarter of 2025, the company expects revenue to fall between $39.5 billion and $41.8 billion, reflecting an 8%-15% annual increase.

META stock  rose by 0.3% at the end of Wednesday’s session to $676.49 and gained another $15 per share during after-hours activity.

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Giuseppe Ciccomascolo

Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors. Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
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