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Carol Masser along with Tim Stanovik live in our Bloomberg Interactive Brokers studio. As we mentioned, those big three of the MAGS seven reporting right now, Meta is up about four and a quarter percent. Microsoft down about five percent off its after market lows. Tesla has also bounced back here.
I want to bring in Bloomberg Intelligence Senior technology analyst on orog Rana. He joins us in Bloomberg's Chicago bureau. Microsoft down five percent right now. Taking a look at some of the headlines on arog dot crossed, I know you've only had a few minutes to actually look at these. Second quarter Azure and other cloud revenue XFX was up thirty eight percent, meeting estimates. Second quarter revenue for the company beat estimates at eighty one point two seven billion dollars.
Second quarter intelligent cloud revenue beat estimates. We also saw forty three hundred Microsoft three sixty five commercial seats grew six percent. Forty five percent of commercial RPO was driven by Open Ai commitments Commercial Remaining Performance Obligation six hundred and twenty five billion dollars. What's not to love here? Is it all about capex?
No? I think it's usually high expectations, and you know the fact that they only met Azure growth rates, which was thirty eight percent. I think that's probably weighing on the stock because you know, one would have expected them to blow out that number. It has been around thirty nine percent the last couple of quotos, so I think that's where a little disappointment could be. But that could also be because of supply constraints. That's something we have
highlighted in our research before. But you know, if you look at some of the other numbers, such as our PO you mentioned above, six hundred billion, that's very impressive, and we already know the capex was going to go up, So I think in tandem, that's the only number that sticks out that they didn't beat by a decent amount.
All right, So then I don't know, what do we want to dig into a little bit more deeper? It does Microsoft's quarter includes net gains from investments.
In open Ai.
Are we going to get a little bit more of a picture about that and what's going on there?
I think the question I have is, you know, there's a big number that you know, that six hundred and ninety six hundred plus billion RQO you mentioned, there is a large portion of that comes from OPENINGI. So the big question is, you know, how is Opening I going to fund this thing? Do they have the capital to actually fund let's say two hundred plus billion dollar commitment. But other than that, what are other clients spending that are not Open EI? And you know, how is that
business going? And if that wasn't the case, how should we look at as your growth in the coming quarters. I think those are the big questions that we need answered right now.
I don't remember where I saw this. I don't remember if it was on a program yesterday. I think I might. My brain is mush. I'm sorry on rock, but was it?
It was all.
About Claude from Anthropic competing with Copilot and Claude offering products and services at a fraction of the cost or even free versus what companies are paying for. When it comes to Microsoft Copilot, how big of a threat is that?
Oh?
Actually, I mean to be very honest, right now, the entire software sector has been absolute under threat because of a lot of what you are mentioning, whether it's claud or whether it's opening Eye tools, or whether it's open source. I mean, look at the valuations of software companies. They've been completely destroyed over the last six to nine months, and a large portion of that is driven by what you just said.
So interesting, Well, you know, yeah, I mean, so is it in flux still safe to say, Ana Rag in terms of who ultimately are going to be the leaders when it comes to this AI world or will there be multiple big players.
So we are absolutely influx right now as to who will own the final product, and that's partially the reason when you have these valuations go all over the place. But I would you know, comfortably say, when it comes to somebody like a Microsoft's cloud portfolio or Amazon's cloud portfolio or Google's cloud revenue, I think these three companies will dictate a large portion of that market share just because they have the capital to do it, they have
massive market shares, and they have also the distribution. So these three I think will remain the way it is, the rest of the industry will shift around. We still think software has a place in this world and you know, there will be some damage, but it's not going to get completely blown up. And let's see how that shapes up.
What's the damage That will say in your view, what's your production.
So if you are just selling a tool out there in the public to an enterprise or a small business, you may not get the same kind of premium that you were before. Remember software a business with eighteen ninety percent gross margin business. But if you can spin some of that coded up, you know, using wipe coding or internally, you may not need some of those tools out there. Now.
We think, at least on the enterprise side, having a core system of record something like you know, the one that's sold by SAP or a workday they're far more important and people are not going to rip them apart and use white boarding tools internally out there. But if you are a visualization software or some kind of connected in between, you may not need to have that software. So there is a lot that's going to happen over the next three to five years.
You know.
Interestingly, you know, looking at Microsoft Meta this year and last year, how the stock the stocks have done. They definitely underperformed some of the other mags seven names and certainly some of the other large.
Cap tech names. But I'm just curious.
You know, the concerns have been about the AI spend and whether it's going to pay off signs here for Microsoft analog that you're seeing that it does make sense this spend that Microsoft is doing.
The ROI is there.
Yeah, well, Microsoft, it's definitely there. I Mean. The only I would say, the long term hangarp is you know what happens when the opening air relationship breaks through? I mean, all goes up way. That's the only big risk for Microsoft in the long run. They'll have to figure out
their own LLM by then. But other than that, I mean, their cloud infrastructure product is pretty good and you know, it's gaining market share and according to our calculations, it will overtake Amazon in the next you know, let's say three audios or so.
On a rock. Do they really have to figure out their own LLM? I mean, how much of open ai do they own?
But it just doesn't matter if they own or not, because they have the IP rights only until I think it's twenty thirty two, one of those years, and after that they can't use those models after that, So remember that part of it as well, not the financial part will stay. But it's the actual engine that is driving copilot, that's driving GitHub copilot or the Microsoft three sixty five copilot that you talk about. You know, that's the intelligence that goes into that model.
How do you do that? How do you do that? From just a resources perspective, if you have if you have spent so many billions of dollars supporting open ai and chat GPT, well.
They have their own models that are going on. It's just not as good as whether it's opening a lot at this point, but they are putting a lot of effort behind it, and most of our leads that and that's where we need to see what kind of ROI do we see there and do they actually get their act together over the next few years.
All right, I want to go over to IBM, which actually outperformed Microsoft last year. It was up about thirty five percent, and we are seeing this stock up about eight point four percent following its earnings release. Here they
post revenue that topped estimates. They talked about software gains, specifically at software unit revenue up twelve percent to nineteen point seven billion in the fourth quarter, software business jumping fourteen percent to just over nine billion dollars and the company projecting that revenue will grow more than five percent this year, and the company's CEO saying, quote, we enter twenty twenty six with momentum and in a position of strength.
I don't know if you've had a chance to look at IBM an a rag walk us through what we're seeing with this company.
Yeah, I was a bit surprised. Actually, the nine percent number on the software side is a witch shocking. I mean, for them to be, you know, total growth rate of nine percent and software in double digits, I mean, we were not expecting that. So there's a lot to feel in that particular one and go back and see, you know, which segments outperformed. Now there's a tiny bit of MNA there, but even without that, I mean, I think this is
very good. And the big number for one us is that the cash flow is going to go up by a billion dollars next year. So I think IBM's turned them around very well. I think the strategy is executing well and Urvan's done a good job in this case.
The acquisitions red Hat Hashi Corp, Confluent. That's a big part of the spend is that like looking to sort of what Salesforce has done in recent years growing through these acquisitions.
I think there's nothing wrong in growing through acquisitions if you don't pay enough for them. If you pay the right amount, and in this case for IBM, every two years they'd go out and buy something that would help their gross margins, that would help their adjusted EBITA, that would help their free cash flow, and they use that
cash flow to buy more. But they're already concentrated in certain areas such as hybrid cloud or the ability to make sure that the internal IEA infrastructure of a company or the enterprises is something that they have a good handle on and I think they're doing executing it very well.
Listen, there are bookings for their AI business at IBM exceeded twelve point five billion.
Since mid twenty twenty three.
That's an increase from the nine and a half billion disclosed during its prior earnings report. A bit more than eighty percent of the bookings come from the consulting unit, with the rest in software. According to the CFO in an interview, their AI exposure, I mean this is something that has been I think helping the struggling along struggling consulting division.
So are we seeing improvement.
But the consulting division only grew up one percent, So even though they are getting a lot of that, as you said, eighty percent of those bookings from consulting, it's not driving the entire division up because, as we know from some of the other vendors and we'll find out today also, the non AI spending is pretty bad right now throughout the ecosystem, so people are cutting back on that and deploying those funds into AI related services, and
that's something that's hurting IBM as well. But imagine, even with consulting growing only one percent, the total compan growth rate was nine percent, and I think that's something to be proud of.
All Right, Bloomberg Intelligence Senior technology analyst Anna Ragrana, just stay with us for a moment, because we do want to bring in James chockmac partner and chief investment officer at Clockwise Capital with about seventy million in assets under management of fund that we often talk about owns and invest in a lot of these big cap names. I want to go back to Microsoft, Jim, James, tell us your take on what we got from Microsoft the stock right now?
Data about four and a quarter percent.
Yeah, it's interesting.
Right before earnings came out, I was getting the latest Bogie numbers for the Azure number, and you know, it remained in the high thirties, around thirty nine percent, and that's kind of where the numbers landed right around there. And uh, I was saying, I'm telling our team that, you know, this is a pretty lofty expectation, especially the fact that you know it's retraced somewhat heading into the quarter.
So you know, a lot of I expectations on all these companies, Microsoft right on up there with all of them, and the valuation it is where it is, with that double digit times sales, you know you want it. It's great that it's a subscription asset, it's a recurring revenue business. But at the end of the day, you know, you've got to deliver the growth and it's all about the growth relative to expectations. And in this case, it was just inline on Microsoft.
James, you own Microsoft in your clockwise US core equity TF ticker time it's the sixth biggest holding, about four point six percent of the fun It's down three point six percent after hours four sixty four roughly would you buy at these levels out to your position.
No, No, I think what we're maintaining it. The way we're looking at it is, you know, we're about half the weight of where it is in the Nasdaq. You know, we feel comfortable being underweight that, and that's on a growth basis. We actually have hedges within the ETF as well where we're short the NASDAC and the SMP, so the net weight is actually closer to four percent, So you know, it is a top top ten weight within
the fund. But you know, we think that you know, where you want to be overweight is outside of big cap. You know, we're looking at small cap, We're looking at continue to look at commodities. We think that's where the money is going to go.
James, We're going to broaden out. But safe to say you're not that impressed with Microsoft.
It sounds it was.
It was a whole hump. You know, it's kind of what we expected. It just didn't surpassed expectations. But does the results do not warrant to change in our view?
All Right, We're going to broad out.
In just a moment, I want to bring in anorog Rana back from our Bloomberg Intelligence team. He's senior tech analyst. Just a final thought, James isn't impressed?
Should he be?
Well, the thing is, think about it this way. The backlog is up and the capexis up, then why is in growth accelerating? And I think that's the biggest question for all of us. I personally think it's a supply problem. But it's a temporary problem. But as you know, we know right now people the trade is to sell software and buy semis and I think you know, I don't see that changing tomorrow morning.
All right, we're going to leave it there. Hey, listen, we'll be checking out your research an ourang, Thank you so much. Bloomberg Intelligence Senior technology analyst Anna rog Rana. James Schachmak though still with us right now. We want to get more meta platforms. Bloomberg New Senior Technology reporter Kurt Wagner with us. He is author of Battle for the Bird, Jack Dorsey, Elon Musk and the forty four billion dollar Fight for Twitter. So he's out there in the Bloomberg San Francisco bureau.
Take it away, meta.
What jumps out for you, because right now we're looking at a stock that's up here in the aftermarket.
Yeah, I mean it's it's pretty much all good news, especially if you believe in this AI vision that Mark Zuckerberg has the Q four holiday quarter sales where it beats the Q one projection, We're beat. The real, maybe surprising thing was just how high the capital expenditures are supposed to be in twenty twenty six. I think the estimate was around one hundred and eleven billion metas forecasting
in between one fifteen and one thirty five billion. But again, if you are a believer in this sort of AI world that we're living in right now, that's an exciting thing. I mean, this is a company that is going absolutely full steam ahead into AI, and you know, I think those numbers reflect that.
Not into the metaverse. We should note that meta shares extend. They're getting to more than five percent right now. So there are a lot of people out there, Kurt, who who are believing this story. It's not like this though every quarter. There have been quarters of late where meta platforms, almost at Facebook comes out and says we're spending more money than you want us to spend and you and then investors do not reward them for it. What is different this time.
Well, not just quarters of late, how about just last order? Right, this is exactly what we talked about in Q three. They didn't have these specific numbers, but they basically said, hey, our capex is going to increase meaningfully. In twenty twenty six, the stock went down fourteen percent. Everyone was very concerned
with this added spending. And yet today when the numbers come out and they're they're higher than estimate, sessimate's presumably built in that commentary from last quarter, it doesn't seem to be as much of a problem. My guess is that they are seeing, you know, this Q one revenue, for example, which is going to come in two three four billion dollars higher than expected. They're just seeing this
ads business that is completely churning money out. And so if you feel that you have the money coming in, maybe you stomach those higher numbers than you would have expected.
Yeah, I mean on the live blog, you guys, I think you put this out Kurt Family daily active people three point fifty eight billion, an increase of seven percent year over year, and then the average price per AD increase by six to nine percent year over year for the fourth quarter and full year twenty twenty five, respectively. So I mean this is showing that they're investing in AI. We're seeing it on the platform, we're seeing it in the ad dollars.
Yeah.
I mean my guess is that we're going to jump on this earnings call here in a minute or two, and you're going to hear the company talk a lot about how AI is impacting the ads business, because that's what they need to do to sell this right now.
Right, it's hard to say are they right?
But current is it?
Like?
Are we seeing it in the numbers?
It is in part because you see that that rise in average cost per AD, that's because people are getting more granular, more targeted. They're spending less to create some of this ad copy because AI can do it for them. There's a bunch of ways that AI can truly improve the ads business.
You just don't.
It's not as sexy, right, It's not as obvious, maybe because a lot of it's happening incrementally behind the scenes. That is a story in a narrative that this company needs to sell. Because if you're just simply saying trust us for building a fifty billion dollars data center in Louisiana, and you'll see the returns of that in seven years. That's the hard pitch.
But if you say, hey, look, check it out.
The ads business is growing quarter after quarter because of these AD improvements, these AI improvements we're making. That's the narrative that they're going to want to sell to people today.
Kirk Wagner, you got to go. You got some work to do. I want you to I want to let you get back to that work. Thanks so much for joining us. That's Kurt Wagner, senior technology reporter who covers social media. He's the author of Battle for the Bird Jackdoor, c Elon Musk in the forty four billion dollar Fight for Twitter's soul.
All right, right now, we're looking at Meta shares. They're up about six point two percent as we speak. We've got Microsoft down about three point six percent. Tesla is up three and a quarter percent. And then check this out. IBM been around for a while. It's up about eight percent here in the aftermarket.
All right.
James Chokmak, we're talking with him, partner and chief investment officer at Clockwise Capital with us from Miami.
He is not going anywhere.
Ed Lulow also with as Bloomberg Tech a co host on Bloomberg Television. He's out there in the bog San Francisco bureau. He has been glued to his phone and computer watching all of the results since he did his broadcast earlier on BTV. Hey, ed, what's jumping out? You know, I don't know where do you think we should start with? Whether it's Meta, Microsoft or Tesla.
I would start with Tesla, but only because you know, the story that jumped out wasn't the story we were prepared for, and I think that it's important to be honest about that. And that is Tesla pulling the trigger on a two billion dollar investment in Xai. If you guys remember, this was a non binding shareholder resolution in November as part of the annual shareholder meeting, and the outcome was kind of weird because a lot of shareholders
abstained from voting. That told us that that even though the board wasn't bound to the outcome, a lot of shareholders were like, h do we really want to go down that route?
Well, Tesla's done it.
Not only are they investing two billion dollars into Xai through Xai's recent Series E round, but they now have an agreement in prace what they call a framework to work on technology and product together. Okay, and it's this like closer inter mesh of Elon Inc.
Right, So, what's the sales pitch to investors in Tesla as a car company, in Tesla as a robotaxi company, in Tesla as a robot company that says, you know, this is in the best interests of shareholders to make an investment in Elon's ai company XAI.
There are like ten different answers to that.
I mean, the first thing to state is that this was believe it or not a double check the Bloomberg the first annual revenue decline that Tesla's ever had, so revenues overall revenues from all its divisions drop three percent, and they blame that on lower vehicle deliveries and sales and lower regulatory tax credits. So that's kind of interesting. But this shareholder deck is about the future where Tesla
doesn't sell vehicles as its principal line of business. It does physical AI through robotics and through robotaxi, and as it relates to XAI. There were definitely two schools of thought. There are the Tesla bulls that basically said if they invest in Xai, all of this stuff will happen quicker because Xai is so good at the software side of AI. They're very bullish Tesla shareholders that were like, whoa this, Xai is a company that burns billions of dollars a quarter.
Do you want Tesla to be the entity that's propping that up? If Tesla's already doing work internally on software. So this was a really interesting deck. The quarter's numbers gone, the quarter gone, I mean, it doesn't really mean anything at this point.
James Chakmark come on in and you know, highlighting that Tesla greet to invest about two billion in Elon Musk's Xai startup. We talked with you a little bit about Tesla before, a small position in your fund. What's how significant do you think that is? Does it make it more interesting the Tesla story here?
Yeah, I mean it'd add another element to the story. But you know that's not why we're investors in it. I don't think that that's going to be something that's you know, factored in in a material way one way or another at the at the current time. So you know, we're looking at it from a long term standpoint. The optionality on all those areas that you listed, from robotics to self driving, autonomous driving, and you know that's where the opportunities lie, and that's why we're invested in it.
But at the valuations that it's at, and you know, question marks around you know, the demand side, and give it a macro backdrop. You know, we just think, you know, it's prudent to be cautious with it, but still maintain a small position in the portfolio.
Uh, but keep that small position and not get not make it any bigger.
At this time, I got to listen to the calls, see see what happens.
I mean, but you could hear you could hear something today. You could hear something today that would make you change your mind.
If and only if it provides a change in my estimates. Because really one of the things that I focus on, I prioritize is what is the degree of the change in the estimates and absolute terms, and also what is the percentage change and estimates and what is the percentage change in the rate of growth Because these companies with these valuations, you have to be able to show the sustainability of those growth curves. Without that sustainability then you
come into questions about the sustainability of the valuations. And with these valuations being where they are, not only from a stock perspective, but the market perspective. You know, one little thing can cause things to break. I mean, you saw what happened with Intel last week, down seventeen percent on that quarter. And you know this is a company that the White House is backing. So you know what, it doesn't take. It takes an instant, you know, to
break the valuation. Even though it takes a long time for that value, we should to expand.
So you gotta be careful, all right, We got to run.
Hey, James, thank you so much hanging around with us for about forty five minutes. Really appreciate going through all these earnings with you. James chock Mak, partner and chief investment officer at Clockwise Capital, joining us from Miami. Still with us, of course, our own Ed Ludlow, Bloomberg Tech co host on Bloomberg TV. You know, Ed, I was thinking about what you were talking about with Xia.
What would you want to ask? What do you hope is asked on the call with the company here?
Oh, just the why they decided to go ahead? What like the more specific rationale was so you know, the concerns were well stated, the worry that Tesla would be kind of the cash cow to fund the loss making business. But they have explained in detail, you know that there's a plan for them to work both on products and technology sharing and that and that was you know, those that were more sorry, guys, Chelsea have just taken the lead in the eighty four.
The only thing and the only thing, the only sorry, your attention away.
That's if the boss if the bosses are watching, I'm really sorry. My phone's going ballistic because it means we qualify for the next phase automatically. Anyway, you know what your guest was just talking about, though, Like the thing that Tesla's done in the shareholder deck in a lot more detail than it's done before, is talk about how these future products are currently contributing to top and bottom line.
Tesla has always done the plus and minus columns of revenue and profit, but actually they started giving a bit more data. So for example, as of the fourth quarter, there will one point one million FC paid subscribers active subscribers. Okay, and in the profit column they are saying that our profit has been boosted by those revenues, by those software revenue sales, and so like extrapolate out to XAI.
You can just envisage your world like I drive every day using.
FSD to work, and in the cockpit of the car, I use the Grock voice assistant to communicate like how do they monetize that you'd expect and to talk about that kind of stuff on the cool I think.
This is this is okay, this is what I'm interested in.
Well, so let's wait. You know what, we want to throw another voice into this. Do not go, Do not leave us at Ludlow. We want you still here. I think our own Steve Man, a Bloomberg Intelligence Global Autos and Industrials research manager, is here with us as well.
Steve, come on in too.
Hopefully you've been listening to what Ed has to say. What what jumps out for you in this Tesla results?
Well, I think on the car side, nothing nothing of surprise, uh with you know, margins a lot better than we expected, but that's only from higher production. But what's really interesting for us is really now you know, Elon must have been talking a lot about rolling out Groobo Taxi. It was just top but now it's kind of codified in the in the presentation now that they're going to roll
out in nine cities beyond Austin. So I think a lot of the investors are expecting, you know, the timeline of that scaling up on robo taxi, and I think we're seeing that.
But the only thing is like, I'm going to go to our live blog and Ed, come on back in here. I'm looking for it on the live blog. But how that they have made promises before to kind of roll out, and.
I mean, it's like it just hasn't happened. That's part for the course for Elon.
No, I know, and we used to have a clock thing, I think on the Bloomberg like tracking, you know, Elon and his promises.
We did an episode of Wall Street Week last month on robotaxi, right, and the opening line was, you know, five years ago, Elon Musk promised that there would be robotaxis all over public roads by the end of that year. And here we are at the beginning of twenty twenty six and in a very limited ten vehicle pilot. Tesla has just removed the safety monitor from those vehicles that are in Austin, Texas for ROBOTAXI WEAIMO, by comparison, has many hundreds more than that on public roads, charging a
fair no human in in operation. The thing is that your last guest deluded to this. You're like pressing him on why he had the conviction in this this thesis. But for lots of people, it's the idea that Elon Musk makes many projections and gives many timelines, and even though he misses those dates, he often gets there in the end. And I suspect that I've said that sentence toe debatam many hundreds of times before.
So Steve Man, come on back here? Does he? Does he get there this time? With the ROBOTAXI rollout?
Is?
Are we going to be riding in robotaxis when we go to visit places apart from Austin anytime soon?
Yeah?
I mean, I think the fact that he's, you know, putting the plan on paper says a lot. You know, from my perspective, it's not just talking anymore. He's making a big commitment to the investors, and that's what the investor are expecting. So yeah, nine cities, mostly down south. I think it. Look, I think the rollout will continue to be slow. I mean, and Tesla is a big name. They don't have much room to make a mistake, so
they're going to take it slow. They're probably going to have safety drivers in those cities initially, similar to what Weimo has done, and then startly removing those safety drivers in once they gain confidence. But at the end of the day, the point is we're expecting scaling up of that business and to drive a new revenue stream for the company, and looks like it's happening sooner than later.
Now.
It's fascinating. I feel a little managed Edla Low come on in here. I mean, it's just amazing that we're talking about Tesla and really not focusing on a less expensive.
Callay, focusing on Chelsea versus Napoli.
No no, no, no no.
But I just know it's fine. It's part of what we love about you. But I mean, it's just interesting that we're like, Okay, it's these taxis and it's robots and it may take a.
While, but we're in. We're in.
And we talked to Kathy Wooden. She's like, this is the company going forward?
Yeah.
I mean, you know, I don't want to speak on his behalf, but Steve's point is echoed by by many that either are bullish or bearish on Tesla. They've put this in the shareholder deck. It's in writing the explanation of what they plan to do, plus some timeline in it, plus the impact to top and bottom line that you
know it's in there. Steve wrote in his January twelfth research without putting him on the spot, that twenty six is the year that Tesla pivots to physical AI for many people, that that is something that started in twenty twenty five. But there is still an element with Tesla right the stocks up less than three percent in after hours that Elon Musk will likely say something on the call that will move the needle, and it's about, you know,
whether investors do or don't believe him. The one little teaser that I will leave with you is there's a line on the deck that talks about deeper vertical integration. And you know, Dana Hole, you know, messaged me right away saying did you see that?
What do you think? That means? Don't know?
But Elon's talks about all kinds of things, building its own chip fab. Where does SpaceX factor into this? One of the most voted up retail questions because you know, test of fields questions from retail investors is will Tesla A shareholders get priority access to a SpaceX ipo.
All of these things keep people looking to the horizon.
It depends on where the planets are aligned, I think is the.
It's great, this is on our live blog. We will manage the businesses such that we ensure a strong balance sheet, maintaining sufficient liquidity to fund our product roadmap, long term capacity expansion plans, including further vertical integration, and other expenses. And as you said, Dana writes, would love more details, and it sounds like you would would too.
You didn't even mention you didn't even hear my planetary alignment joke.
Oh sorry, okay, ed laugh Johnnie Steve Mann final thoughts from you thirty seconds here when it comes to Tesla.
Yeah, you guys talked about a little bit about the two billion dollar investment in Xai. It totally makes sense for me because, look, Grock is starting to be integrated into Tesla vehicles. You know, especially in the navigational you can tell groc basically, you know, I want to go home, but in between I want to stop at Starbucks or stop at the grocery store and actually will help you
navigate to those different points. And look that that you know they're testing it out now, that system won't be on the robotaxi because you know there's no driver there. So it's if you take a step back and look at this thing, this whole elon must AI thing. I wouldn't be surprised if there's going to be more kind of cross investments between the companies that are all going to be tied together on this AI endeavor.
Wait, did I hear circular financing again? I don't know.
I don't know anyway, fascinating faster, Steve Man, thank you so much. Bloomer Intelligence Global autos and Industrial's research manager joining us here. Hey real quickly ed thirty seconds for you go anywhere. Whether it's Meta which is rowling about nine percent in the aftermarket, Microsoft down five percent, Tesselas up three percent, where do you want to go?
The stories are really straightforward.
Meta said that revenue growth strong, and then they boosted the capex range for the year beyond consensus.
It's a simple formula. We're repeating.
Microsoft's Azure cloud unit growth thirty eight percent, in line with estimate consensus, but at the top end, people were like, where's my forty percent growth? And they told us about their capital expenditures and those kind of exceeded, and still the market was disappointed. It's a very high bar on a simple formula that we've discussed. Endlessly spend more on AI investment in infrastructure, but show us very strong top line growth as a direct result of it.
You rock, go back to the match, all right. Of course, that's Ed Lovelow as OA is. He is co host of Bloomberg Tech on Bloomberg TV. Catch him at eleven am Wall Street Time Monday through Friday.
H m hmm.