Tech Titans Microsoft, Meta and Tesla Kick Off Earnings Season with Mixed Results

Microsoft sees AI-powered growth, but faces challenges

Microsoft's earnings for its second fiscal quarter of 2025 exceeded expectations, demonstrating robust growth driven by the company’s cloud computing and artificial intelligence (AI) business.

Analysts had projected revenue of US$68.81 billion and EPS of US$3.11.

However, Microsoft surpassed these forecasts, reporting revenue of US$69.6 billion for the period, a 12 percent increase year-on-year, and EPS of US$3.23, a 10 percent year-on-year rise.

2025 has already brought several big developments for Microsoft. The company announced an US$80 billion investment in US-based AI infrastructure, reorganized its cloud and AI teams and integrated AI tools into Microsoft 365.

However, concerns over the cost of the Stargate AI project and competition from Chinese rival DeepSeek have fueled market volatility and sparked investigations into potential data misuse. Despite these hurdles, Microsoft remains committed to its AI-driven strategy, though the path forward appears complex and competitive.

Microsoft led S&P 500 (INDEXSP:.INX) losses on Wednesday, along with NVIDIA (NASDAQ:NVDA). The company closed at US$442.33 and is continuing its downward trajectory in after-hours trading.

Meta exceeds expectations, plans AI investments

Meta's Q4 2024 earnings exceeded analysts' expectations, demonstrating growth and a strategic focus on AI.

While analysts had projected revenue of US$46.99 billion and EPS of US$6.76, Meta surpassed these forecasts, with company revenue reaching US$48.39 billion for the quarter and US$164.5 billion for the full year; those represent annual increases of 21 percent and 22 percent, respectively. EPS for Q4 came to US$8.02.

Looking ahead, Meta anticipates Q1 2025 revenue in the range of US$39.5 billion to US$41.8 billion, and total expenses of US$114 billion to US$119 billion for the full year. The company did not provide full-year revenue guidance.

Meta's performance reflects this positive outlook. Despite a slight dip of 1.28 percent during the trading day, the stock ended slightly higher and surged by 4.66 percent in after-hours trading.

Key to Meta's plans are significant investments in AI. CEO Mark Zuckerberg has committed US$60 billion to US$65 billion for AI infrastructure and is expanding the firm's footprint in the wearables market, reportedly partnering with Oakley on smart glasses and planning new releases for its Reality Labs division.

Tesla deals with pressure, results mixed

Tesla's Q4 2024 earnings arrived against a backdrop of challenges for the electric vehicle maker.

The company's share price has been under pressure due to a confluence of factors, including an aging vehicle lineup, controversies surrounding CEO Elon Musk, a ratings downgrade from Bank of America and a new investigation into its self-driving technology by the National Highway Traffic Safety Administration.

Furthermore, potential policy changes, such as the repeal of electric vehicle incentives, are casting a shadow of uncertainty over the company's future investments and production plans.

While the company surpassed production and delivery expectations during Q4, with approximately 459,000 vehicles produced and over 495,000 delivered, it missed revenue and EPS projections.

Revenue reached US$25.7 billion, falling short of the anticipated US$27.12 billion, and EPS were US$0.73, missing the projected US$0.77. The company anticipates increased vehicle sales in 2025, supported by key initiatives like an unsupervised Full Self-Driving (FSD) option for customers and the launch of a robotaxi business later this year. According to Tesla, FSD is scheduled to expand to Europe and China in 2025.

Additionally, Tesla says it's on track to produce new and more affordable vehicle models in H1 2025.

However, Cybertruck production is facing further delays — it's now set to start by the end of 2025 with full production in early 2026. Tesla expects the Cybertruck to be eligible for the US Inflation Reduction Act's consumer tax credit, making the vehicle more affordable and accessible. Optimus hardware and software are also progressing ahead of schedule, emphasizing Tesla's move beyond the automotive industry.

Tesla shares were in steady decline on Wednesday and closed at US$389.10, slightly above their intraday low. After hours, the company recovered from a 5.5 percent loss to trade higher.