The Rundown - Microsoft & Meta Crush Earnings, Tesla Denies Report It Searched for New CEO

Episode Date: May 1, 2025

Stock market market update for May 1, 2025. The content of the video is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures.Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Public.com presents the rundown, your daily market update in five minutes. My name is Zaid Admani, and today is Thursday, May 1st. In today's episode, we'll recap earnings from Microsoft and Meta. Both of these tech giants are putting up huge numbers and ignoring all the tariff drama. We'll also tell you about Apple's latest loss in court and the impact that it's having on their stock price. Then stick around to the end of the show to find out why the Tesla Board of Directors was thinking about replacing Elon Musk as CEO. Got a great show for you today.

Let's go. The market pulled off another surprise comeback yesterday, finishing in the green after being down big earlier in the day. Honestly, it's a pretty fitting end to the month of April, which has been one of the most volatile months that we've had in a long time. The markets were whipsawed on a daily basis from tariff headlines and policy flip-flopping from the Trump administration. But after all of that, the S&P 500 finished April down less than 0.1%.

Kind of crazy. I guess all the tariff nonsense and the trade war drama was all priced in. Now, looking forward a bit, all eyes are going to be on Jerome Powell and the Federal Reserve. There's a Fed meeting taking place next week. And right now, according to the CME Fed Watch tool, the market's only pricing in a 5% chance that the Fed will cut interest rates. Now, there's some concerns bubbling up about cracks forming in the U.S. economy. Yesterday we found out that the U.S. GDP in Q1 came in at negative 0.3%.

That was the first time the U.S. economy contracted since 2022. Now, a big reason for that was the huge surge in imports in Q1 as companies tried to front run the tariffs. We talked more about that on yesterday's episode, so go check that out if you missed it. But yeah, the vibes are a bit weird right now. There are signs that the economy might be slowing down and inflation might creep back up because of the tariffs. And that puts the Fed in a tough spot. So we'll see what Jerome Powell has to say about all this. The Fed meeting is on Wednesday with Jerome Powell's press conference around 2 p.m. Eastern.

Should be a fun one, especially all the questions that Jerome Powell is going to get from journalists. I'm sure someone's going to ask about Trump threatening to fire him. And I wonder if Jerome Powell is finally going to switch up his tie color to signify a vibe shift. You know, he's been wearing purple for over a year now. I think he should switch it up to send a signal. Let's run through some headlines. And we're starting with earnings from Microsoft. Microsoft reported earnings last night after the market close.

And man, they are still putting up some monster numbers. Microsoft's total revenue jumped by 13% in Q1 to $70.1 billion. And their profits jumped 18% to over $25.8 billion. The MVP of Microsoft's Q1 earnings has to be their Azure cloud business, which grew sales by 33% in Q1. And to add to that, Microsoft CFO, Amy Hood, said that Azure could grow up to 35% next quarter. I think we have to shout out Microsoft's AI efforts.

They haven't been as flashy as OpenAI or Google, but they seem to be focused on building AI tools for their enterprise clients. They've been bundling AI tools like Co-Pilot into their office products. A lot of you guys that use Microsoft products at work probably know what I'm talking about. Co-Pilot is everywhere. And Microsoft is trying to convince,

these enterprises to upgrade to the more expensive tiers to get access to these AI tools. Now, what did catch my eye from this earnings report was that Microsoft's CapEx actually dropped in Q1 for the first time in two years. Now, this could be a sign that they might be slowing down on their AI data center buildout. There have been rumors for months now that Microsoft is backing out of some data center leases, but Microsoft's CFO said that CapEx will still grow in their upcoming fiscal year, but just at a slower pace than before. But yeah, overall, Microsoft just crushed Q1 earnings. They had double-digit growth on both top line and bottom line, and the company doesn't expect tariffs or the macroeconomic environment to have a meaningful impact

on their business moving forward. So you can see why investors were hyped about this. Microsoft stock is up more than 9% this morning at the time of this recording, and that surge in stock prices put Microsoft back on top as the most valuable company in the world, overtaking Apple. Apple does report earnings tonight, so depending on how that goes, Microsoft might not hold the crown for too long. We'll recap Apple's earnings on tomorrow's episode, so make sure you guys tune in for that. Now, the other big tech giant to report earnings last night was Meta, and similar to Microsoft, they put up some pretty strong numbers. Meta's revenues were up 16% year over year in Q1 to $42.3 billion, and their profits were up 35% to $16.6 billion.

Meta's advertising business, which is their bread and butter, it makes up 98% of their total revenue, it didn't show any signs of a slowdown or weakness. So all the macroeconomic uncertainty tied to tariffs and the trade war did not impact ad spend in Q1 on Meta's platform. Now that being said, tariffs didn't really heat up until April. In fact, Meta's CFO Susan Lee did say they're starting to see some pullback in ad spend from Asian e-commerce platforms, you know, companies like Sheehan and Timo. So Metas Q2 might look a little different. Beyond just the ad spend, I got to mention AI, because it's become a big focus for meta. Meta says they're planning to crank up Capax

to as much as $72 billion this year, most of that going into data centers and infrastructure to support their AI ambitions. Now, Meta's not looking to monetize AI just yet. CEO Mark Zuckerberg straight up said that. He says that meta is focusing on making meta AI to just be great and to get more users to use it. They're hoping that by launching a standalone meta AI app

like they did this week, it's going to help them better compete with ChatGPT. So yeah, there's another AI app out there now to add to your AI folder on your phone. Now I do want to bring up the Metaverse stuff, even though Meta probably doesn't want to talk about it. It's still losing a ton of money. Meta's Reality Labs Division lost $4.2 billion in Q1. Now that's less bad than what was expected, but it's still burning a lot of cash. You know, I wonder how many VR headsets that Zuck has collecting dust in his garage. But the big picture is that Meta's main business, their ad business,

is still doing great. So investors shrugged off the VR losses. They're focusing on the ad business. They're also focusing on the AI story coming out of meta. And that's pushing the stock higher. It's up more than 5% this morning in reaction to the earnings. Let's talk about some stocks making moves today. Shares of General Motors are up this morning after the automaker updated their full year forecast to reflect the impact of Trump's trade tariffs. And yes, obviously GM had to cut their guidance from what they projected at the start of the year. But it looks like investors were bracing for worse. The GM says they now expect a $4 to $5 billion hit from the tariffs,

and apparently that's not as bad as what Wall Street was expecting. As a result, shares of GM are up nearly 4% this morning on this news. On the flip side, Apple stock is sliding this morning after a U.S. judge accused them of basically ignoring the 2021 Epic Games ruling against them that was supposed to stop Apple from charging developers a fee for certain in-app purchases. Now, if we don't have time to get into the details of the case, maybe we'll do a deep dive about this sometime in the future. But Apple used to charge a 30% fee.

But after the ruling against them in the 2021 Epic Games trial, Apple lowered their fee to 27%. The judge was not happy with Apple about that. In fact, the judge even accused an Apple executive for lying under oath in the Epic Games trial from back in 2021. So now Apple's going to have to deal with this. They might have to drop their App Store fees even more to comply with the judge's ruling.

We'll have to see what kind of impact this has on their business, but the initial reaction for the markets are not great. Apple stock is down around 2% this morning on this news. Let's wrap the show with a fun fact. This one is pretty wild. The Wall Street Journal reported last night that Tesla's board of directors has quietly opened up a search for a new CEO. Apparently they're looking for someone to eventually replace Elon Musk.

Now, Elon, along with Tesla's board chairman, were quick to publicly deny this story. But according to the Wall Street Journal, Tesla's board was getting frustrated that Elon's been spending most of his time working on Doge for the Trump administration. And while he's been doing that, Tesla's sales and profits have taken a nosedive. And not to mention the brand damage to Tesla from Elon's political involvement. So I can see the board getting frustrated with that, but again, they're denying this report. I do want to point out that Elon did say on last week's earnings call that he plans to spend less time on Doge and more time focused on Tesla. Honestly, though, I do sometimes wonder how much longer Elon wants to even stay on as Tesla CEO,

because I feel like he's kind of lost interest in EVs. I feel like he's way more into robots and space and AI these days. And I wonder if he ever does step down as CEO, how big of a drop would there be in Tesla's stock price? Because love him or hate him, Elon is a big part of the Tesla story. So I think if you ever stepped down, the stock price would tank. But I don't know. Let me know in the comments what you guys think would happen to Tesla if Elon is. actually walked away. Well, all right, guys, that's the rundown for today. That was an action-packed

episode, and we got one more to go to wrap up this week. In tomorrow's episode, we're going to be recapping earnings from Apple and Amazon. Really looking forward to seeing what Amazon has to say and the impact that tariffs are having on their business. So it should be another big episode to wrap up the week. And the next week, we got the Fed meeting. So great time to get subscribed to the podcast. You don't want to miss any episodes right now. Thank you guys again for listening. Shout out to Mike and Connor for all the help behind the the scenes and we'll see you guys back here tomorrow.