Big Tech Earnings: Meta & Apple Soar, Tesla Stumbles, Microsoft’s AI Challenge

Money Masters' Market Pulse Week 5

January 31, 2025

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Dear Money Master,

Earnings season is here! 📊 Meta crushed expectations, Tesla missed forecasts, Microsoft’s cloud growth disappointed, and Apple’s gross margins hit record highs. Plus, the Fed held rates, Eurozone growth stalled and OpenAI seeks $40B funding. 🚀

In today’s deep dive, we explore 🌍The New Digital Asset Accounting Rules & What They Mean for Investors.💼

📰 Your Daily Financial Digest - January 31st, 2025

🌍 Finance & Economics:

  1. Fed Holds Rates Steady Amid Economic Uncertainty 🏦
    After three consecutive cuts, the Fed kept interest rates at 4.25%-4.5%, citing a resilient job market but persistent inflation. Markets expect rate cuts later this year. Read More

  2. Eurozone GDP Stalls in Q4 as Germany and France Contract 📉
    The eurozone economy saw zero growth in Q4, dragged down by contractions in Germany and France. Spain and Portugal, however, posted positive growth. Read More

  3. OpenAI Seeks $40 Billion at $340 Billion Valuation 💰

    OpenAI is in talks to raise up to $40 billion, with SoftBank potentially leading the round with a $15B–$25B investment, surpassing Microsoft as its largest backer. Read More

💻 Technology:

  1. Meta Won’t Cut AI Spending Despite DeepSeek’s Breakthrough 🤖
    Zuckerberg dismissed the idea of lower AI spending after DeepSeek’s low-cost model spooked Nvidia investors. Meta plans up to $65 billion in AI infrastructure. Read More

  2. SoftBank Eyes $25 Billion Investment in OpenAI 💰
    SoftBank is in talks to become OpenAI’s top investor, potentially reshaping AI’s competitive landscape. The move aligns with its push into AI infrastructure. Read More

  3. Tesla’s Bitcoin Holdings Boost Q4 Profits by $600 Million 🚀
    A new accounting rule let Tesla recognize Bitcoin’s market value gains, significantly inflating its net income despite declining auto revenue. Read More

💹Earnings:

  1. Meta Exceeds Earnings Estimates as AI Ambitions Grow 🚀
    Meta posted Q4 revenue of $48.39 billion, surpassing forecasts. Zuckerberg expects its AI assistant to reach over 1 billion users, reinforcing its dominance in the AI space. Read More

  2. Microsoft Misses Azure Growth Targets, Stock Falls 📉
    Despite beating revenue estimates, Microsoft’s slower-than-expected Azure growth and weak Q3 forecast sent shares down 5%. AI remains a key driver, but execution challenges persist. Read More

  3. Tesla’s Q4 Earnings Miss Estimates as Auto Revenue Declines ⚡
    Tesla’s revenue rose just 2%, missing expectations. Auto revenue fell 8%, impacted by price cuts. Net income dropped 71% YoY due to lower margins and fewer regulatory credits. Read More

  4. Apple’s Gross Margin Hits Record High 🚀

    Apple's gross margin reached 46.9% in Q1, its highest ever, driven by strong growth in its services business, which now makes up 21% of total revenue. Read More

🌍 Deep Dive: The New Digital Asset Accounting Rules & What They Mean for Investors💰

Starting in 2025 the Financial Accounting Standards Board (FASB) has changed how companies account for digital assets like Bitcoin. Previously, firms had to report these assets at their lowest historical value, even if their market price increased. Now, under the new "mark-to-market" rule, companies must update the value of their digital holdings each quarter to reflect fair market prices.

This shift has major implications. Tesla, for example, saw a $600 million boost in Q4 profits due to Bitcoin’s rising value. Companies with large crypto holdings will now show more earnings volatility, as digital asset prices fluctuate significantly.

Additionally, the SEC is scrutinizing how crypto assets are classified on balance sheets. While some firms label them as current assets, regulators argue that unless liquidation is imminent, they should be treated as non-current intangible assets.

For investors, this means more transparency but also increased earnings swings for companies holding digital assets. Expect crypto-heavy firms to report sharper earnings fluctuations going forward. 🚀📉 

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Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.