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Alphabet, Tesla Kick Off Magnificent 7 Earnings
Two of America's vaunted "tech" septet reported quarterly results after the bell on Tuesday.
Three months on from introducing a first-ever dividend and hiking buybacks, Alphabet said revenue grew 14% YoY (15% ex-currency impact) to $84.74 billion, ahead of estimates. The Street was looking for $84.35 billion.
The company returned to double-digit top-line growth in Q3 of last year after sales growth nearly flat-lined towards the end of 2022.
The ex-TAC print, at $71.36 billion, was likewise
Tesla is in between a growth wave and a CEO that made a fortune off of greenies and government subsidies, and then decided it’s time to go full nut job, and turned on both.
My wife bought a Model Y, just before Musk went down the rabbit hole. It’s the last Tesla we will ever buy. I doubt we’re alone in that sentiment, so that might be something Wall Street keeps an eye on. I doubt the ‘drill baby, drill, roll’n coal” crowd is going to make up the difference.
Now if you’ll excuse me, the MAGA mobile needs another cover thrown over it. SHAME!
Honestly, I wouldn’t let his politics stop me from buying a Tesla except for the fact that it’s collecting data about my whereabouts, and so on, and he’s (allegedly, according to The New Yorker) been on the phone with the Kremlin at least once since the war started without telling the State Department about it first. If true, that’s the kind of thing (random chats with the Kremlin) that seems bizarre to me, and it’s why I worry about him having NASA contracts, and giving people brain implants and so on. But hey, I bought the stock in April. I’m perfectly willing to invest in Musk’s genius and his companies. I just wish he’d reconsider whether, perhaps, he’s gone a little too far with the red pill stuff.
Fair enough and good points.
I’m done with Musk’s marketing ploys though, and minimally, if I owned shares, I’d be concerned that Musk is putting his interests ahead of the investor’s. Sounds like an Orange Man I know that puts his interests ahead of everybody’s.
Never have owned TSLA nor a Tesla. Former is too volatile…hard to get my brain around fundamentals; latter, like any BEV, isn’t practical given most of my miles come in chunks of 300 or so in the wide open spaces of CO & NM. We are, however, enthusiastic about small bites of SpaceX and xAI shares we’ve been able to take.
I detest Elon’s turn to the dark side (yes, Darth Vader jokes are so Cheney, early 21st century! ) but if his genius is to turn truly evil at least some profits from it may fund my expatriation.
Never-Tesla buyer here.
It has seemed to me that 2H24 is when the big cloud/online names will start reporting slowing YOY growth, as comps get harder and the 2022 cost actions are anniversaried. Looking at GOOG, I think unless AI or some other growth driver steps in to offset the harder comps, consensus for 2H revenue looks somewhat too high. With the big capex now throwing off higher D&A and operating costs, margins expectations also seem not as beatable as before. I know, GOOG says AI has generated “billions” of dollars in revenue YTD. But on an $80BN base, and considering the $50BN/yr capex runrate, that seems a bit vague. “Tens of billions” would be reassuring. But “billions” could be $1.1BN or $2BN.
As for TSLA, beyond declining volume, price, and margins, the CEO’s support for anti-EV politicians, and continued pushouts of Model 2, Robotaxi, FSD, and basically everything, it is pretty obvious that the company and its shareholders are merely Musk’s piggy bank for his other interests. Note the -10% drop today coincides with his release of a “poll” purporting to show support for TSLA investing $5BN into xAI.
As a TSLA shareholder, how much do you like the idea of the next 3+ years of FCF being invested in Musk’s privately owned AI venture? TSLA will probably also pay xAI to run the compute behind FSD, Robotaxi, etc.
Reminds me of Softbank for some years. Or, dare I say it, Warren Buffet?
We are a fifth of the way through earnings now, although only a seventh of the way though Mag 7 reports, so time to start tracking.
21% by name / 20% by cap of the S&P 500 has reported. 63% by name / 70% by cpa have beaten cons rev, 34% by name / 42% by cap have seen 3Q cons rev go up. 84% by name / 88% by cap have beaten cons EPS, 36% by name / 46% by cap have seen 3Q cons EPS go up. Average price reaction to report has been -0.6% by name, +1.4% by cap.
Best sectors so far Health Care, Tech; worst sectors Comm Srvc, Cons Disc.
That’s by my reckoning, anyway. Reading some think Financials has been the best sector so far.
L1M sector performance led by Real Estate, Health Care, Financials – just using sector ETFs as proxy. Comm and Tech worst. Cons Disc was good but dumping now.
So based on beat, raise, reaction, and L1M, maybe ST want to be in RE HC Fin.