Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: This is the closing bell on the stock movers report
Speaker 2: the company's making moves at the close of US trading
Speaker 2: with Carol Masser, Tim Stenebeck, Romain Bostik, and Katie Greyfell.
Speaker 3: All right, guys, and just taking a quick check here
Speaker 3: on the S and P five hundred. It's funny I
Speaker 3: had and I earning Zapp and I was just like,
Speaker 3: have they come across yet? You've got one hundred and
Speaker 3: ninety names, Katie to the upside, three hundred and thirteen
Speaker 3: to the downside.
Speaker 4: All right, let's sick look at the sector performance as
Speaker 4: we count down. Slightly more losers than winners in terms
Speaker 4: of what did perform today, Energy putting up a game
Speaker 4: of about seven tenths of a percent, Tech of about
Speaker 4: six tents of percent as we await these ginormous earnings. Materials,
Speaker 4: communication services also in the green. In terms of what
Speaker 4: didn't perform so hot today on this sped day, real
Speaker 4: estate down by nine tenths of percent, Consumer staples Carol
Speaker 4: also off by about eight tenths of a person.
Speaker 1: Microsoft burning is crossing the wire right now. First here
Speaker 1: on Bloomberg, we take a look at the headline number
Speaker 1: revenue in the most recent quarter, eighty one point two
Speaker 1: seven billion dollars. The street was looking for eighty point
Speaker 1: three EPs, coming in at five dollars and sixteen cents
Speaker 1: a share. I don't have a comparison for you just yet,
Speaker 1: but at the here's the intelligent cloud business thirty two
Speaker 1: point nine to one billion dollars, relatively in line with estimates.
Speaker 5: The street was looking on.
Speaker 1: Average for thirty two point three nine And we shall
Speaker 1: also point at Azure and other cloud revenue XFX that
Speaker 1: was up thirty eight percent in the quarter, right around
Speaker 1: what the street was looking for.
Speaker 3: All right, all right, let's go to Meta also crossing
Speaker 3: the Bloomberg terminal as we speak.
Speaker 6: I'm going to go right to the outlook.
Speaker 3: The first quarter revenue looking at fifty three point five
Speaker 3: billion to fifty six point five The street estimate was
Speaker 3: for fifty one point twenty seven billion. The stock right
Speaker 3: now bop it around, but lower, just about nine tenths
Speaker 3: to the downside.
Speaker 6: Now maybe kicking a little bit higher.
Speaker 3: Let's go to the fourth quarter revenue fifty nine point
Speaker 3: eighty nine billion, better than the street estimate of fifty
Speaker 3: eight point forty two billion AD revenue. So important, let's
Speaker 3: see whether not all those AI investments are paying off
Speaker 3: when it comes to getting more eyeballs and more AD revenue.
Speaker 6: Fifty eight point fourteen billion. That is a beat.
Speaker 3: Fifty seven fifty six point seventy nine was the street estimate,
Speaker 3: and also EPs eight dollars eighty eight cents a share
Speaker 3: versus eight dollars and two cents the year before. So
Speaker 3: again that stock though a little bit lower, down about
Speaker 3: one percent here in the aftermarket.
Speaker 1: That capex number, yes, twenty twenty six company saying cappex
Speaker 1: one hundred and fifteen billion to one hundred and thirty
Speaker 1: five billion. The street was looking for about one to ten.
Speaker 1: So Meta and more importantly, Mark Zuckerberg still all in
Speaker 1: here on the AI build out.
Speaker 4: Well to that point, Mark Zuckerberg saying that we had
Speaker 4: strong business performance in twenty twenty five. I'm looking forward
Speaker 4: to advancing personal superintelligence for people around the world in
Speaker 4: twenty twenty six. Lofty ambitions, of course, but as you
Speaker 4: can see in the after hours reaction, investors want to
Speaker 4: know how do you translate that into actual profits and revenue?
Speaker 6: And the bottom line here, I want to.
Speaker 7: Go back to this this cap capex here, it's in
Speaker 7: the press release, it's a headline in the Bloomberg. We
Speaker 7: anticipate twenty twenty six capital expenditures, including principal payments on
Speaker 7: finance leases, to be in the range of one hundred
Speaker 7: and fifteen to one hundred and thirty five billion dollars,
Speaker 7: with year over year growth driven by increased investments to
Speaker 7: support our metas, superintelligence labs efforts, and core business. That
Speaker 7: is so much higher, and that is also a much
Speaker 7: bigger range than I would have anticipated up to one
Speaker 7: hundred and thirty five billion dollars to spend on capex.
Speaker 1: And just adding to that, the total expense number one
Speaker 1: hundred and sixty two to one hundred and sixty nine billion.
Speaker 1: Street was looking for one fifty one. And this really
Speaker 1: gets to the idea I mean, I mean, we can
Speaker 1: quibble over the numbers from a fundamental basis, but we've
Speaker 1: seen this before with Mark Zuckerberg, where when he basically
Speaker 1: decides he wants to go all in something, whether it
Speaker 1: was the metaverse and the no Legs people, or are
Speaker 1: some of the actual hardware stuff.
Speaker 5: He goes all in.
Speaker 1: Yeah, it doesn't always sort of pay off, but he
Speaker 1: certainly makes big roles of the diet.
Speaker 7: To your point, super intelligence labs, the idea of super intelligence,
Speaker 7: artificial intelligence. That's throughout the press release. The word metaverse
Speaker 7: not in here at all. This company rebranded from Facebook
Speaker 7: to Meta because Mark Zuckerberg a few years ago was
Speaker 7: going all in on the metaverse. That pivot it's took
Speaker 7: completely to AI.
Speaker 3: I'm going to go back to the Microsoft right now,
Speaker 3: down about seven point six percent here, can I just
Speaker 3: one but just.
Speaker 1: At that point for you move on too. I mean
Speaker 1: the Reality Labs business. I mean, to your point, Tim,
Speaker 1: that's down twelve percent year over year. There's no real
Speaker 1: business there. It's nine hundred and fifty five million dollars,
Speaker 1: which would not be an issue if this wasn't like,
Speaker 1: you know, a fifty eight billion dollar quarter com.
Speaker 5: Totally, this is an advertising company, yep, full stop.
Speaker 3: No.
Speaker 4: So when it comes, you know, to that pivot to
Speaker 4: the metaverse, remember earlier this month that Bloomberg reported that
Speaker 4: Meta is beginning job cuts basically in Reality Labs as
Speaker 4: it shifts from the metaverse to its AI devices. So, yes,
Speaker 4: Zuckerberg tends to go all in, but that doesn't mean
Speaker 4: also that he doesn't occasionally shift away as well.
Speaker 3: All right, I want to go back to Microsoft because
Speaker 3: it's down about seven percent here in the aftermarket this
Speaker 3: after the company. Again, CAPEX is something we're talking about
Speaker 3: a lot for these companies, but also Azure always important
Speaker 3: for this company. Second quarter Azure another cloud revenue X
Speaker 3: currency up.
Speaker 6: Thirty eight percent. That's what the street was expecting.
Speaker 3: And I think it's safe to say with the spend
Speaker 3: that we continue to see with these companies, people are
Speaker 3: looking for even better numbers when it comes to that.
Speaker 1: Yeah, actually, guys, let's go up the Tesla here. These
Speaker 1: numbers starting to trickle out right now. The EPs numbers
Speaker 1: coming in right now at fifty cents a share.
Speaker 5: That does look like a beat.
Speaker 1: The street was looking on average for about forty five cents.
Speaker 5: That's all the numbers we have right now. It's going
Speaker 5: to take a.
Speaker 1: While to pass through the Tesla released because of course
Speaker 1: they don't follow normal formatting for anything here, but those
Speaker 1: shares slightly lower in the after hours Train one percent down.
Speaker 4: Yeah, absolutely, it's going to be interesting to get some
Speaker 4: of these figures here. It is interesting to see that
Speaker 4: price targets from the seal side have been rising even
Speaker 4: as Tesla's profit outlook really in question. You can see
Speaker 4: shares now down about one percent here as we start
Speaker 4: to get some more of these numbers.
Speaker 7: Ten okay, fourth quarter grows margin d point one percent,
Speaker 7: that beat estimates of seventeen point one percent. Fourth quarter
Speaker 7: operating income coming in above estimates at one point four
Speaker 7: to one billion dollars. Fourth quarter revenue coming in just
Speaker 7: shy of twenty five billion dollars at twenty four point
Speaker 7: nine billion dollars, that was just below estimates. Fourth Quarter
Speaker 7: earnings per share coming in at twenty four cents versus
Speaker 7: sixty six cents. That's year over year, so that was
Speaker 7: not an estimate, but twenty four cents for fourth quarter EPs,
Speaker 7: fourth quarter free cash flow one point four to two
Speaker 7: billion dollars. The estimate there was for one point five
Speaker 7: to nine billion dollars.
Speaker 3: I mean to be fair, and just listening to some
Speaker 3: of our team talk about from the Bloomberg Intelligence team,
Speaker 3: you know what you want to hear from Tesla. There's
Speaker 3: a lot of folks want to hear about self driving cars,
Speaker 3: autonomous cars, the taxi, and they also want to hear
Speaker 3: about robotics because that is seen as the future of
Speaker 3: this company.
Speaker 1: Yeah, free cash flow in the quarter for Tesla one
Speaker 1: point four to two billion, that's slightly below estimates. But
Speaker 1: I want to go back to Katie's point too, because
Speaker 1: I think she was referencing the great story that was
Speaker 1: on the Bloomberg terminal just about how insane this valuation
Speaker 1: and the idea that a lot of investors don't think
Speaker 1: it's insane. This isn't really a bet on cash flow
Speaker 1: or a profitability.
Speaker 5: He's not in the short term or cars.
Speaker 1: It's a bet on exactly tim It's bet on these
Speaker 1: moonshots that we know Elon Musk is great at at
Speaker 1: least advocating for. Whether he actually delivers on them, that's
Speaker 1: a whole another question.
Speaker 5: But he is the consummate salesman.
Speaker 1: He has focused our attention less on those cars, less
Speaker 1: on the cash generator from those cars, and more on
Speaker 1: whether Katie's going to have a humanoid robot to make
Speaker 1: her omelin in the morning.
Speaker 7: Which he did say last week at Davos she would
Speaker 7: have in the next year.
Speaker 4: Yeah, theoretically, I will say, to put it even more directly,
Speaker 4: I mean it's a bet on Elon Musk, specifically Elon
Speaker 4: Musk's ability to sort of engineer those moonshots. You think
Speaker 4: about the Musk premium in relation to Tesla's shares, We've
Speaker 4: never actually exactly found out what that is, but I
Speaker 4: mean you compare Tesla to some of the other car
Speaker 4: companies out there, It's in just a completely different league,
Speaker 4: and it has been for years now.
Speaker 7: Yeah, it's not even valued as an auto company. On
Speaker 7: that Investors valuing this report least the knee jerk reaction
Speaker 7: now higher by three point eight percent. Shares did initially
Speaker 7: drop on the release, but now shares are up for
Speaker 7: Tesla three point eight close to four percent.
Speaker 1: The company saying that it does plan to invest further
Speaker 1: in those autonomous robots and the infrastructure for that, also
Speaker 1: says that cybercab, the Semi and Mega Pac three that's
Speaker 1: still on schedule. Katie Greig Philip for twenty twenty six.
Speaker 1: So elon Musk once again laying out some of these
Speaker 1: long term looks here and saying that maybe at least
Speaker 1: this year we might start to see some of that
Speaker 1: stuff come online.
Speaker 4: Well, you can see that faith express right now in
Speaker 4: the after hours reaction. Let's quickly pivot here to international
Speaker 4: business machines IBM. The red headline here that fourth quarter
Speaker 4: revenue came in at nineteen point six y nine billion dollars,
Speaker 4: that is above the estimate of nineteen point two to
Speaker 4: one billion dollars. They see their full year cash flow
Speaker 4: increasing by about one billion dollars year over year.
Speaker 5: Their fourth quarter free cash.
Speaker 4: Flow came in at seven point five five billion dollars,
Speaker 4: that is above the estimate of about six point eight
Speaker 4: five billion dollars. IBM shares high by about two percent.
Speaker 3: Right now, All right, let's go back to Tesla again,
Speaker 3: getting some commentary about some of the future perhaps revenue drivers,
Speaker 3: and this is what investors are kind of banking on.
Speaker 3: But we are talking about remain mentioned this the cybercabs,
Speaker 3: Semi and Megapac three on schedule for twenty twenty six.
Speaker 3: That's this year Tesla to invest further in autonomous robots,
Speaker 3: infrastructure and ramping six new production lines across products.
Speaker 6: And so we're continuing to look now at.
Speaker 3: Tesla now up about three point four percent here in
Speaker 3: the aftermarket.
Speaker 1: You know, I'm going through some more numbers here coming
Speaker 1: out of Microsoft. Here we're talking about a company with
Speaker 1: eighty one billion dollars in revenue in the most recent
Speaker 1: quarter and operating income of about thirty eight billion. The
Speaker 1: company is saying though, of that income, at least on
Speaker 1: the net income basis, about seven point six billion dollars
Speaker 1: of that actually came from its investments, again, on its
Speaker 1: investments in open AI. I know, Katie Greifeld, you're always
Speaker 1: concerned about the oral boris here, this sort of circular
Speaker 1: thing here, but at least in the short term, maybe
Speaker 1: a little bit of a benefit fit all some of
Speaker 1: those investments here, so contributing to the company's bottom line.
Speaker 3: There you have it, all, right, Just to quick check,
Speaker 3: Meta Platforms up about three percent here in the aftermarket,
Speaker 3: Microsoft down about five point three percent, and then we've
Speaker 3: got Tesla, which has been bouncing around. That one is
Speaker 3: right now as I pull it up, up about three
Speaker 3: point six percent here in the aftermarket. So we'll be
Speaker 3: looking forward to those calls with the analyst and investment community.
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