US Earnings Preview: TSLA, META, MSFT
Get insights into the upcoming Q4 earnings reports for Tesla (TSLA), Meta (META), and Microsoft (MSFT). Analysts predict revenue and EPS growth, with a focus on AI investments, market trends, and stock performance.
Tesla (TSLA)
Key numbers:
- EPS, $0.75
- Revenue, $27.21B
- Q1 EPS Guidance, $0.69
Tesla is projected to deliver modest revenue and earnings growth in the fourth quarter, with analysts projecting EPS to rise to $0.75 and sales to lift to $27.21B. The result comes as Tesla battles headwinds related to margin pressures along with lower deliveries. Recent delivery data released at the start of January showed the first ever annual drop in deliveries, with CEO Elon Musk cautioning about slower growth in the year ahead.
The automaker is confronting several challenges ranging from a weaker demand backdrop, rising cost pressures at some of its critical plants, and greater competition from rivals, especially China’s emerging EV manufacturers. The dynamic has compressed margins as Tesla sticks to a more aggressive pricing strategy in order to compete for market share.
In more positive news, Tesla’s topline should be padded by sales of its megapack product as the company increases production. There is also hope that future sales, which are expected to be solid next quarter, will be bolstered by orders for an updated Y model.
Tesla shares have surged in recent months, although the rise is little to do with the company’s fundamentals. The victory of Donald Trump in November’s US Presidential election and Elon Musk’s privileged place as an unofficial member of the administration has fueled a rally in Tesla stock that saw the price nearly double. Although part of this could be because of expected favourable treatment by the Trump administration, the rally could simply be because of Musk’s meme value.
The dynamic means that Tesla stock may be prone to downside surprises in earnings, with price to earnings ratios at a lofty 120/1, the most expensive of the so-called Magnificent 7 companies. It’s led to a mixed view on Tesla in the analyst community, with the stock dividing analysts (according to Bloomberg, 28 suggest a buy, 16 a hold, and 14 a sell), who have a price target well below market value at $338.00.
Despite potential growth headwinds and fears about how expensive it is, Tesla shares look positive on the charts. The share price is carving out a continuation pattern which may indicate a looming break-out. A break-down of this set-up would be a clear bearish signal.
(Source: Trading View)
(Past performance is not a reliable indicator of future results)
Meta Platforms (META)
Key numbers:
- EPS $7.67
- Revenue $46.98
- Capex Est. $US51B in 2025
Meta Platforms is expected to deliver record revenues in the fourth quarter, driven by rising ad spending. The strong consumer backdrop in the United States is supporting the company’s topline. However, there are signs that the US’s America First policy mantra could be benefitting the company, with the migration away from TikTok due to regulatory uncertainty seeing business ad spending shift towards Meta.
While the company’s results and guidance will be critical to how the stock trades in response to the earnings release, the most important information will likely pertain to artificial intelligence investment. This is especially the case after the week’s developments relating to China’s AI upstart DeepSeek, which has raised questions about overinvestment, waste, excess capacity and lower returns on AI capex. Analysts expect capex to rise in 2025 as Meta ploughs money into its Llama 4 product.
Like every other Magnificent Seven stock, there are concerns about multiples and whether Meta will achieve its desired turns from AI spend. Despite this, analysts remain constructive on the company’s stock, with the stock maintaining an overwhelming buy rating, although its consensus price target is effectively equal to the current market price.
The charts for Meta Platform show a stock with extraordinary upside momentum and in a clear bullish trend but that may be technically overbought. After breaking out from a clear symmetrical triangle pattern to fresh record highs, support could be found around $640.
(Source: Trading View)
(Past performance is not a reliable indicator of future results)
Microsoft (MSFT)
Key numbers:
- EPS $3.12
- Revenue $68.9B
Microsoft’s fiscal Q2 results are projected to show modest earnings and revenue growth of 6% and 11% respectively. Like Meta, the company’s results will be framed around AI spend and monetisation, with analysts predicting headway from Microsoft on this front. Analysts remain upbeat on Microsoft stock, with the consensus recommendation overwhelmingly a buy and the price target at a significant premium to current valuations at $505 per share.
The earnings call will also be homing in on the impact of DeepSeek on its business, especially following news that Microsoft is probing whether the Chinese AI start-up improperly obtained OpenAI data, a company which Microsoft is a major stakeholder.
The weekly chart shows a stock that is in a primary uptrend but currently consolidating. Price action is carving out a triangle continuation pattern, signalling a possible break-out, a dynamic which could see Microsoft’s challenge resistance at all-time highs around $US480.
(Source: Trading View)
(Past performance is not a reliable indicator of future results)