WEBVTT - Meta Gains on AI Spending; Microsoft Falls on Azure Growth; Tesla Plots $20 Billion Splurge

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market. Harnessing the power of Bloomberg Data.

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<v Speaker 1>Let's take a look at some stocks on the move today.

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<v Speaker 1>I'm Nathan Hager, joined by Bloomberg Stan Curtis. On another

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<v Speaker 1>very busy morning for earnings. The attention continues on the

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<v Speaker 1>big tech names. Of course, two very different reactions to

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<v Speaker 1>big spending from Meta Platforms and Microsoft. Dan, good morning, Good.

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<v Speaker 3>Morning, Nathan. You hit a nail on the head with that.

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<v Speaker 3>It's just the difference in reaction this morning between the

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<v Speaker 3>two tech giants, with Meta up eight percent, Microsoft down

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<v Speaker 3>seven percent. Says so much about the markets these days.

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<v Speaker 3>So both companies came out reported earnings and sales that

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<v Speaker 3>beat estimates. But here's the difference. Microsoft as Zoo sales

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<v Speaker 3>came out just above estimates, but despite the beat, it's

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<v Speaker 3>still seen us somewhat disappointing. That said, the spending was

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<v Speaker 3>higher than expected from Microsoft, with over thirty seven billion

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<v Speaker 3>dollars being invested in the past quarter. That leaves Wall

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<v Speaker 3>Street questioning the return on Microsoft spendings. The capex is

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<v Speaker 3>growing more than expected, and the sales are not growing

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<v Speaker 3>by the same level. That's putting the stock on the

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<v Speaker 3>back foot this morning. Meta, on the other hand, different story.

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<v Speaker 3>The company is giving a strong forecast for the current

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<v Speaker 3>quarter and is expecting fifty five billion dollars in sales

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<v Speaker 3>this quarter. It's leaning on its AD business for that,

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<v Speaker 3>and it is spending big. It plans to spend up

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<v Speaker 3>to one hundred and thirty five billion dollars in capex

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<v Speaker 3>this year. But the core business is seen supporting the

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<v Speaker 3>AI spending spree. That's why Meta is up eight percent today.

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<v Speaker 3>Microsoft is down seven percent in the pre market, So

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<v Speaker 3>just two sides of the same coin.

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<v Speaker 1>Yeah, we also heard from Tesla. Of course, investors seem

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<v Speaker 1>to like signs of a pivot away from their core business.

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<v Speaker 3>That's right, Tesla. We typically come on and call it

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<v Speaker 3>a car company. I'm not sure how much longer we'll

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<v Speaker 3>be able to do that. Those shares are up two

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<v Speaker 3>and a half percent in pre market. Top line missed,

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<v Speaker 3>bottom line did be in fourth quarter. But the big

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<v Speaker 3>news about this is the company is doing a bit

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<v Speaker 3>of a reshuffle. It's going to spend twenty billion dollars

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<v Speaker 3>to reshuffle its factory it's discontinuing two of its oldest vehicles,

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<v Speaker 3>the Model S and the Model X, to make room

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<v Speaker 3>for building its Optimus humanoid robots. It's increasing bets away

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<v Speaker 3>from the cars, pivoting towards its EV business, focusing on

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<v Speaker 3>AI and robotaxis. Investors cheering that this morning.

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<v Speaker 1>Yeah, we've got lots more earnings to get to this morning,

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<v Speaker 1>and a lot of these even though their industrial names

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<v Speaker 1>seem like they're driven by the AI trade as well.

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<v Speaker 1>Tell us more about what we got from Dow this morning.

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<v Speaker 3>Yeah, So Dow Chemicals Company announced the will terminy about

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<v Speaker 3>four five hundred rolls out of nearly thirty five thousand employees.

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<v Speaker 3>It's looking to simplify and streamline its operations, and as

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<v Speaker 3>you said, this does tie back to AI. It's going

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<v Speaker 3>to leverage AI and automation as part of the plans.

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<v Speaker 3>So through this it's looking for two thirds of the

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<v Speaker 3>benefits to come from productivity, the recipe driven by growth.

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<v Speaker 3>Company did also announced fourth quarter sales that were just

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<v Speaker 3>around estimates, but those job cuts really taking the headlines

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<v Speaker 3>this morning. That has left the stock down three percent

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<v Speaker 3>in pre market.

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<v Speaker 1>And we also heard from a Caterpillar this morning as well.

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<v Speaker 1>What's the story there.

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<v Speaker 3>Yeah, again AI. Typically I hear Caterpillar and I think

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<v Speaker 3>of these big yellow tractors, but it actually makes equipment

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<v Speaker 3>that's been a thing from the AI boom. So it

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<v Speaker 3>posted fourth quarter earnings of five dollars and sixteen cents

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<v Speaker 3>of share, ten percent above estimates. That's driven from the

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<v Speaker 3>power and Energy unit. If you haven't heard about that before,

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<v Speaker 3>it's because it's been a relatively sleepy unit, but it's

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<v Speaker 3>become the largest and fasting growing segment as it sells

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<v Speaker 3>power generators, gas turbines, and engines to produce electricity. That's

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<v Speaker 3>helping within this whole data center build out boom.

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<v Speaker 1>Just time to tell us about earnings from International Paper, Dan.

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<v Speaker 3>Yeah, so International Paper, we are hearing that that company

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<v Speaker 3>may actually split off its European business. It's the stocks

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<v Speaker 3>is up nearly four percent in pre market right now. So,

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<v Speaker 3>according to someone familiar with the matter, it could split

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<v Speaker 3>out spin off its European business. It's seen strong growth

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<v Speaker 3>in Europe, has got two point three billion dollars in

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<v Speaker 3>the third quarter from the region, up nearly three hundred million.

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