The Rundown - Tesla Eyes Robotaxi Rollout in June, Meta Stands Firm on Massive AI Investment

Episode Date: January 30, 2025

Stock market update for January 30, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Thursday, January 30th. In today's episode, I'll recap yesterday's Fed meeting and tell you what Jerome Powell said that got the crypto industry pretty excited. We also report earnings from Tesla, Meta, Microsoft, IBM, and UPS. There's been some interesting reactions from the markets, especially for Tesla. All right, let's go. Well, guys, the markets were back in the red on Wednesday.

The S&P 500 was down 0.5% and the NASDAG dropped 0.3%. It looks like investors weren't loving what they heard from Jerome Powell at the Fed meeting yesterday. So let's talk more about the Fed meeting. I've been hyping it up all week and there was some moments, okay? For one, the Fed unanimously voted to keep rates unchanged. That was expected. The Fed funds rate will still be between 4.25 and 4.5%. The Fed has cut rates by a full percentage point over the last three meetings, but they don't seem to be in the rush to drop rates further.

Inflation continues to be sticky in the 2 and a half percent range, which is higher than the Fed's 2 percent target. And the labor market continues to be strong. So the Fed is going to do a wait and see approach before making any major moves on interest rates moving forward. Now, as expected, Jerome Powell got a couple questions about Trump in his press conference. Trump last week made a comment that he would ask for interest rates to be lowered immediately. And literally the very first question that Jerome Powell got was about the president's comments. He said that he hasn't talked to the president yet and he won't comment any further. That didn't stop President Trump from taking the truth social last night to criticize Jay Powell

and the Fed and blaming them for creating inflation. So yeah, I wonder how this is all going to play out and what kind of relationship Jerome Powell is going to have with President Trump. The next Fed meeting isn't until March 19th. And right now the markets are expecting an 82% chance of no rate cuts at that meeting as well. So we might be stuck with the current interest rates that we have for a while now. I wonder what Trump thinks about that. Oh, by the way, Jerome Powell mentioned Bitcoin and crypto in his press conference, which definitely was not on my bingo card.

He was asked the question about the risks from digital assets, and he said that banks were perfectly able to serve crypto customers as long as they understand and can manage the risk. And the crypto industry took that as a bullish sign. In fact, Bitcoin jumped almost 5% from $100,000 to nearly $105,000. And for those of you guys that were curious, Jerome Powell was also wearing a purple tie. Again, let's run through some headlines. And we are going to recap earnings from Tesla, META, and Microsoft. All three reported earnings last night and some interesting reactions by the markets.

Let's start with Tesla. They reported revenues and earnings per share that missed estimates, but they had strong performance in their energy business, which helped offset weaker auto sales. And it also provided a silver lining for investors. Now, Tesla's total quarterly revenues increased by 2%, which was good, but their auto sales declined by 8% year over year. Tesla's expanding energy division more than doubled its revenue to $3 billion. I feel like not many people talk about Tesla's energy division,

but it's delivering record gross profits right now and easing some of the pressures from their slowing EV demand. Tesla's profits were down 71% in Q4. Now, for the full year of 2024, Tesla's global vehicle delivery is dropped by 1%, making that the first annual decline in over a decade. No, with auto sales slowing down, Tesla is leaning further into self-driving technology as a key selling point for investors.

On the earnings call CEO, Elon Musk said the company will be launching an unsupervised full self-driving car as a paid service in Austin in June of this year. If they do actually launch, I'm probably going to make a drive to Austin to check it out. Tesla also set on a post on X and it's expecting to launch robotaxy services in parts of the U.S. later this year

and continue to work on launch. launching FSD supervised in Europe and in China in 2025. Elon promised to roll out the much anticipated cheaper models in the first half of 2025. So I guess he has a few months to do that. And he also said there's a path where Tesla is worth more than the next top five companies combined because of their self-driving tech and the development of their humanoid robots, optimists. I mean, look, Tesla and Elon are known to make big promises and he's doing that again. So we'll have to see if they end up delivering this time.

Investors seem to be counting on it. shares of Tesla are up more than 4% this morning in reaction to these earnings. So in summary, Tesla missed earnings, but their stock is up this morning because of course it is. All right, let's shift gears and talk about meta. Their shares are up this morning because their earnings beat expectations and Mark Zuckerberg talked a big game about how 2025 is going to be a big year for AI. I guess the metaverse gets no love anymore. He told analysts on the earnings call that he expects meta's personal AI chatbots to reach more than a billion people while also reassuring that meta plans to spend billion of dollars on building AI infrastructure. I'm sure Nvidia investors are relieved to hear that.

He didn't seem to be that concerned about the Chinese AI app Deepseek. So far, about 700 million monthly active users used Meta's AI chatbot in Q4. But there's still a lot of room for growth because the company has about 3.35 billion people using its social platforms every day. And beyond just the AI stuff, Meta's other businesses are booming. Revenue was up in their recent quarter and topped estimates. Profits were up as well. I think the only thing negative to come out of the earnings was that their sales outlook for the current quarter was a bit below what Wall Street was expecting. But that wasn't enough to scare away investors. In fact, meta stock is up around 4% this morning and it's currently trading at all-time highs. And finally, let's talk about Microsoft.

The OG tech giant, currently the second most valuable company in the world, they reported earnings last night and their stock is down. That's because the growth in their cloud computing division fell short of projection. Sales for their Azure business increased 31% in Q4 and Microsoft expects similar growth for the current quarter, but Wall Street wanted to see more. See, part of the issue is, according to Microsoft, was supply constraints for non-AI cloud customers. Microsoft CFO says these issues will likely be resolved by the end of the year. One positive note for Microsoft was that their AI cloud revenue was better than expected, with AI services accounting for 13% of Azure's growth. But investors seem to be nervous about the slowdown in Azure's business,

and Microsoft's stock is down around 5% this morning in reaction to these earnings. Let's talk about some stocks making moves today. And speaking of an OG tech company, IBM shares are up big after the company reported better than expected quarterly results that were boosted by AI demand. The company said that its generative AI business has grown to over $5 billion, which is up $2 billion in the recent quarter alone. But what really drove IBM's business was their software sales, which recorded its best growth in five years as clients accelerated spending on cloud infrastructure. Now, I'll be honest, I'm not really sure what IBM's. does. And I feel like they were kind of early to the whole AI thing with their IBM Watson.

But whatever they're doing seems to be working because their stock is up more than 13% today. In fact, it's trading at all time highs. Now, on the flip side of stock not doing so good this morning is UPS. Their shares are down despite reporting earnings that beat expectations. The drop in the stock price might be related to news regarding their largest customer Amazon. Beginning in the second half of 2026, UPS is slashing its volumes with Amazon by 50%. Now, Amazon spent the last few years building up their own logistics and delivery networks, which means they don't need UPS as much.

That's weighing on long-term guidance and adding more concerns about a slowdown and UPS's core package shipping business, which has been on the decline since peaking back in 2021. As a result, shares of UPS are down more than 15% this morning. Let's wrap the show with the fun fact. Twin Peaks, a sports bar company that competes against Hooters, is going public. The bar chain has 115 locations and its IPO will value the company north of a billion dollars. The stock will start trading today and its ticker symbol is TWNP.

I've never been to Twin Peaks. I've always been a B-dubs guy, but I might have to check it out. Well, all right, guys, that's the rundown for today. We got one more episode tomorrow to end the week. And it should be a good one because Apple is reporting earnings today after the market close. So really curious to see what they say. We'll be recapping those earnings on tomorrow's episode. So make sure you guys tune in for that. If you guys enjoyed today's episode, consider giving us a five-star rating on Apple, on Spotify.

Vote in today's Spotify poll. Leave us a comment on Spotify. Follow our Instagram account for clips of this podcast or bonus content. All that engagement really does help us out, and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow. This is the rundown.

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