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Big Tech earnings season has begun!
All tech companies — especially the “Magnificent Seven” — have a lot to prove. Investors want it all right now, from great 2026 guidance to signs these companies made money from AI investments in the fourth quarter.
“I do think that there will eventually be a correction [in tech],” prominent venture capitalist Bill Gurley said in a new episode of Yahoo Finance’s Opening Bid Unfiltered podcast (listen below). “And one of the reasons that I feel strongly about that is that so many of the players, so many of the competitors, especially the deep-pocketed venture-[backed], ones that have raised tons of venture capital, they’re losing massive amounts of money.”
“More than Uber ever lost, which was a lot and more than Amazon ever lost,” he added. “And so the burn rates are bigger than they’ve ever been in the history of venture capital. And eventually they’re going to want to bring those in.”
The first crop of tech earnings didn’t exactly deliver on every single front I just mentioned, though some excelled.
I loved the more emotional Elon Musk on the Tesla (TSLA) earnings call, loved that he thinks we are entering an age of amazing abundance, and appreciated that he got sad when talking about scrapping the Model S and Model X to cut costs and use their respective factory lines to make humanoid robots. Maybe the Cybertruck should be next — who doesn’t hate trying to park a car next to one of those monsters?
So why did investors like the quarter (shares are up 2% on Thursday as of this writing), where total deliveries tanked 16% because people don’t want electric cars?
One, there were signs throughout the earnings call that Tesla is entering a period in which robotaxis and humanoids will be key contributors to the business. Two, Musk said Tesla needs to build and operate what he is calling a “TeraFab” to manufacture semiconductors. This will cost billions, as Intel (INTC) can attest. But this is the type of bullish nugget that Tesla fans eat up, as it shows Musk is all-in on building a different, possibly more lucrative, Tesla in the next decade.
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Analyst hot take: “There were multiple vectors of progress this quarter with robotaxi, optimus, energy, chip design, etc.; however, at this multiple, we see considerable success across all these products already built into the stock, and remain at Market Perform,” said William Blair analyst Jed Dorsheimer.
Markets got another corporate jargon-filled earnings call from the Microsoft (MSFT) team. It has almost reached the point where investors can’t understand what Microsoft is even working on.
My brief take on the stock getting hit by 6% Thursday morning is that Azure cloud sales missed estimates, Azure sales guidance wasn’t super strong, and capital expenditures were above Street estimates. Although at least Microsoft showed signs of monetizing AI: It called out 4.7 million paid Copilot subscribers, up 75% year over year.
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Analyst hot take: “Management talks of doing what’s right for the business long-term, and we agree with that. But again, this is a vast business with considerable resources and the ‘capacity constrained’ narrative is getting a little long in the tooth,” said Guggenheim analyst John DiFucci.
Like longtime foe Elon Musk, Meta (META) CEO and co-founder Mark Zuckerberg is laser-focused on charting a possibly more lucrative future for the social media giant.
The Street is shrugging off Meta’s potentially doubling capex year over year to $135 billion — shares are up 7% today. Instead, more attention is being placed on how Meta’s AI investments are driving better revenue across Facebook, Instagram, and Threads.
Meta CFO Susan Li had the details on the earnings call:
“On Facebook, video time continued to grow double digits year-over-year in the US, and we’re seeing strong results from our ranking and product efforts on both feed and video surfaces. The optimizations we made in Q4 drove a 7% lift in views of organic feed and video posts on Facebook, resulting in the largest quarterly revenue impact from Facebook product launches in the past two years … On Instagram, we grew the prevalence of original content in the US by 10 percentage points in Q4, with 75% of recommendations now coming from original posts. Threads is also seeing strong momentum, again, benefiting from recommendation improvements. The optimizations we made in Q4 drove a 20% lift in Threads time spent.”
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Analyst hot take: “We remain encouraged by the progress management had made towards key areas of longer-term opportunity, and over time, Meta has the potential to monetize its AI assistant, Meta AI (reached over ~1B global monthly active users) across several use cases, including AI agents for businesses, deeper automation of advertiser tools and creative, and ongoing integration of genAI capabilities into Meta hardware products,” Wedbush analyst Dan Ives said.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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