SPY, QQQ Boosted Thanks to Microsoft, Tesla, Meta Results
Tesla and Meta shares gained in part due to bullish leadership, while Microsoft shares fell as its cloud-computing business dipped.
A big day for earnings led to some interesting moves for tech stocks and the ETFs that hold them Thursday.
Meta Platforms Inc., Microsoft Corp., and Tesla Inc. all reported quarterly earnings results after the bell Wednesday, leading to sharp reactions to not only their own stocks but shares of other big tech companies like Nvidia Corp. and Broadcom Inc. as well.
The SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) were last trading up by 0.5% and 0.4%, respectively, reflecting the generally positive tone of the earnings releases.
Tesla Gains on Robotaxi Talk
The biggest gainer among the reporting companies, however, was Tesla, which rose more than 3% on the day.
The automaker reported lackluster revenue and earnings numbers for the fourth quarter, missing on both the top and bottom lines. But investors didn’t seem to care as they focused on CEO Elon Musk’s bullish comments about the future.
According to Musk, Tesla plans to launch a fully autonomous taxi service in Austin, Texas in June, and the company will build 10,000 humanoid robots this year.
If Tesla is successful in these futuristic endeavors, Tesla could be worth “more than the next top five companies combined,” Musk predicted.
The bullish talk fueled enthusiasm among Tesla stockholders, helping them forget about the disappointing fourth-quarter results for Tesla’s current core electric vehicle business.
Meta Pops, Microsoft Drops
Not to be outdone, Meta CEO Mark Zuckerberg made some bold predictions of his own, saying that 2025 could be the year his company builds “an AI engineering agent that has coding and problem-solving abilities of around a good mid-level engineer."
Shares of Meta climbed 2% Thursday thanks to Zuckerberg's excitement about the future, as well as strong earnings results for Q4.
On the other hand, shares of Microsoft tumbled more than 6% as growth in the company’s cloud computing business came in lower than some investors had hoped.
“Azure growth of 31% was at the low end of guidance, with some impact from execution challenges in the broad partner channel. The issues appear fixable, though will impact revenue in the coming quarters,” analysts at Bank of America wrote in a report.
Nvidia and Broadcom Diverge
While Tesla, Meta and Microsoft were the companies reporting earnings this week, their results and accompanying management commentary had a big impact on shares of semiconductor companies like Nvidia and Broadcom.
Chip investors paid close attention to forecasts concerning how much money would be spent on capital expenditures, and in particular, AI data centers.
Both Microsoft and Meta indicated that spending on AI investments would continue to be strong, however, Microsoft hinted that growth would slow next year.
At the same time, Meta suggested that it could utilize its own custom AI chips in place of Nvidia GPUs for some workloads. The news shook Nvidia, which dropped 3% on Thursday, while Broadcom, a partner in Meta’s custom silicon efforts, rose by 5%.