WEEKEND UPDATES - 2/1/25

The Federal Reserve paused its interest rate cutting campaign last Wednesday and gave no signal it plans to lower rates again in the foreseeable future.  The decision to hold rates steady at a range of 4.25% - 4.5%. Obviously, FED  seems little careful of re-inflation fear and potential impact because of President Donald Trump’s economic policies.

The Personal Consumption Expenditure (PCE) report came last Friday that rose 2.6% over the year in December, up from 2.4% in November and in line with economists forecast.

Meanwhile, the DeepSeek drama that crushed tech stocks last Monday seems to be overblown. I will write more on my next blog. Stay tuned! 

EARNINGS

Meta Platform (META)

Earnings per share: $8.02 vs. $6.77, up 49% YOY.

Revenue: $48.39 billion vs. $47.04 billion, up 21% YOY.

Meta said its first-quarter revenue would be in the range of $39.5 billion - $41.8 billion. Analysts were expecting first-quarter revenue of $41.73 billion.

My View: Meta’s earnings is one of the best in the Tech sector and has crushed in last couple of quarters. The projection for current quarter was also good. I  may not like Facebook but I like META stock. It’s solid AI play.

Tesla (TSLA)

• Earnings per share: 73 cents vs. 76 cents expected
• Revenue: $25.71 billion vs. $27.26 billion expected

My View: The bad news is Tesla missed on both top and bottom line. However, for the long term shareholders the future looks very promising per Elon Musk. I have provided some details about Elon’s update from conference call (see below). Musk is an innovator and won’t bet against him. It’s worth accumulating this stock for long term.

Microsoft (MSFT)

• Earnings per share: $3.23 vs. $3.11 expected
• Revenue: $69.63 billion vs. $68.78 billion expected

With respect to guidance, Microsoft projected $67.7 billion - $68.7 billion in fiscal third-quarter revenue compared with the $69.78 billion.

My View: Microsoft stock has lost its momentum. Azure revenue growth was lukewarm. Overall, I do not expect too much from this stock in the near term. 

Apple (AAPL) Earnings

Apple could manage to beat the top and bottom line but failed below expectations for iPhone sales.

• Earnings per share: $2.40 vs. $2.35 estimated 
• Revenue: $124.30 billion vs. $124.12 billion estimated 
• iPhone revenue: $69.14 billion vs. $71.03 billion estimated 
• Mac revenue: $8.99 billion vs. $7.96 billion estimated 
• iPad revenue: $8.09 billion vs. $7.32 billion estimated 
• Services revenue: $26.34 billion vs. $26.09 billion estimated 

My View: China sales has been the biggest problem for Apple. The good news is they could manage to have better revenues on some segments like Mac, iPad etc. However, the Apple Intelligence which should be its strength has not yet materialized. I just want to hold it as I don’t see any major catalysts right now.

Lam Research (LRCX): it’s another stock that is on my blog portfolio. On January 29, Lam Research it posted EPS of $0.91, beating estimates by $0.03, and revenue of $4.38 billion exceeding forecasts by $70 million. For FQ3, the company expects a revenue of $4.65 billion and a net income of $1 per share.

Tesla (TSLA): More updates per Elon Musk

• 2025 is a pivotal year for Tesla. When people look back on 2025 and the launch of Unsupervised FSD, they may regard it as the biggest year in Tesla's history
• He sees a path for Tesla being the most valuable company in the world and predicts bigger than more than top 5 companies combined! 
• Humanoid robot or Optimus has the potential to generate more than $10 trillion in revenue.
• He expects an epic 2026, and an absolute ridiculously good 2027 coming. He said, things are going to go ballistic next year, and really ballistic in 2027 and 2028.
• Affordable model Q car production to start in 2025, probably less than $30K

The company also announced that Tesla is going to provided a free retrofit upgrade for HW3 cars if at any stage the company realizes this system is unable to run Unsupervised FSD. However, the free hardware upgrade will be provided only to customers who purchased the Full Self-Driving Capability software package with their vehicles.

Tesla Product Release - Estimated Timeline 

— 2025 —

• New Model Y release

• FSD launch in China

• Cybertruck RWD

• Model Q reveal

• Semi mass production

• Optimus in a non-Tesla company

• FSD (Unsupervised) / Robotaxi

• First rides with CyberCab and ride-hailing app in Texas and California

• Longer 6-seat Model Y for China

— 2026 —

• FSD launch in Europe

• Model S/X refresh

• CyberCab production start

• Optimus mass production

• Roadster launch

• Model 3 refresh

• Semi launch in Europe

— 2027 —

• CyberCab mass production

• RoboVan

• Optimus for everyone

ASML reported which beat the estimates and better guidance. Though chip stocks are down we may see renewed interest because the news from DeepSeek should be potentially beneficial for chip demand, as lower-cost AI solutions might lead to broader application and hence, more chip sales.

ECONOMIC REPORT Next week

MONDAY, FEB. 3:  ISM manufacturing

WEDNESDAY, FEB. 5: ADP employment, U.S Trade deficit

FRIDAY, FEB. 7: U.S. employment report

Earnings Next week

2/4: GOOG

2/5: ARM, UBER, QCOM, DIS

2/6: AMZN

Stocks to Watch

AMZN, GOOG, ARM, TSLA, META, NOW, NVDA, AVGO, CRM, SNOW, QCOM, MRVL

I am planning publishing my February blog and next Investment Meet in next couple of weeks. Stay tuned!