Should Tesla Investors Be Worried?

Should Tesla Investors Be Worried?

The electric vehicle (EV) maker [TSLA] reported Q4 adjusted earnings of $0.73 per share, falling short of the $0.75 consensus estimate. Adjusted net income rose 3% to $2.5bn, missing the $2.6bn forecast, while revenue climbed 2% to $25.7bn, below the $27.2bn estimate. Tesla’s operating margin dropped to 6.2% from 8.2%, hit by discounted prices and rising artificial intelligence (AI) and R&D costs. Elon Musk promised that this year will see an improvement, with its driverless ride-hailing service launching in Texas by June.

MSFT Beats on Revenue, Misses on Cloud

Microsoft [MSFT], by contrast, beat quarterly forecasts for revenue and net income, but its cloud division — its top revenue driver — fell just short of estimates, the Financial Times detailed. Despite Azure’s AI services revenue surging 157% year-over-year, CFO Amy Hood warned that capacity constraints would persist into 2025 before easing by fiscal year-end. Overall cloud revenue rose 21% to $40.9bn, missing the $41.1bn estimated by a Bloomberg survey. 

Zuck: “Really Big Year” Ahead 

Meta [META] beat Q4 forecasts with a 21% revenue jump to $48.4bn and a nearly 50% surge in net income to $20.8bn. The company has ramped up AI investments to enhance content recommendations on Facebook and Instagram and improve ad targeting. “This is going to be a really big year,” CEO Mark Zuckerberg said on a call with investors, pledging to ramp up AI spending further. 

EU Tariffs Dent Chinese EV Sales

Chinese EV makers saw an annual decline in registrations in Europe in 2024, with 3.5% fewer EVs registered for the full year — their first annual drop in five years — amid trade barriers and weak demand. According to Dataforce figures quoted by Bloomberg, Chinese firms including SAIC’s [600104:SS] MG, BYD [BYDDF] and Xpeng [XPEV] held an 8.5% market share for the year. Several lawsuits are underway regarding the EU’s tariffs, which went into effect in November.

SoftBank Looks to Up Stake in OpenAI

SoftBank [SFTBY] is in talks to invest $15bn–25bn in OpenAI, the Financial Times reported, potentially supplanting Microsoft as the start-up’s biggest backer. The Japanese firm has already committed $15bn to Project Stargate, a Texas-based AI infrastructure venture with OpenAI. Discussions are still in early stages and may not lead to a deal; both firms declined to comment.

Can India Become an AI Player?

India’s government has announced it is to back 18 AI-related proposals with computing power, data and funding, according to Bloomberg. Minister of Electronics and IT Ashwini Vaishnaw said six major developers could build foundational AI models within 8–10 months. India will cover 40% of computing costs, aiming to create models that can compete with global leaders. 

How Long Until a TikTok Buy-Out?

The TikTok saga rolls on, as a US investor group backed by YouTuber MrBeast has secured over $20bn for a TikTok bid, organizer Jesse Tinsley said. The group includes Roblox [RBLX] CEO David Baszucki and Anchorage Digital CEO Nathan McCauley, Bloomberg reported. Tinsley claims their offer exceeds a rival $20bn bid, possibly from Project Liberty, led by Frank McCourt and Kevin O’Leary.