Tesla’s revenue saw a modest 2% increase, climbing to $25.17bn (£20.2bn) from $24.68bn a year earlier. However, automotive revenue took a hit, falling 8% to $19.8bn from $21.56bn in the same quarter last year. Of this, $692m came from regulatory credits. Operating income also declined, dropping 23% year on year to $1.6bn.
The company pointed to lower average selling prices across its Model 3, Model Y, Model S, and Model X vehicles as a key factor behind the revenue decline. Net income saw a drop of 71%, falling to $2.32bn, or 66 cents per share, compared to $7.93bn, or $2.27 per share, in the same period last year.
Despite the setback in earnings, Tesla remains optimistic about its future prospects. The company is on track to launch new, more affordable models in the first half of 2025 and is set to begin testing its Cybercab service in June.
Tesla also said it was cutting costs. The company noted that the process will be more "capex efficient" and expects a maximum production capacity of close to three million vehicles, allowing for more than 60% year-on-year growth.
In its shareholder presentation, Tesla said: “Affordability remains top of mind for customers.” The company stated that it plans to "review every aspect" of its cost of goods sold per vehicle to ensure its EVs remain accessible to a broader consumer base.
Investor sentiment has been bolstered by broader enthusiasm around AI advancements and the tailwinds of regulatory changes, particularly following Donald Trump’s election victory. As a result, Tesla’s stock has surged by more than 100% over the past 12 months.
Sales in the fourth quarter surged 21% year-on-year, while net income climbed 49% to $20.8bn, up from $14bn a year earlier. The company also provided guidance for the first quarter, expecting revenue to fall between $39.5bn and $41.8bn. However, the midpoint of this range trails analysts' expectations of $41.73bn in first-quarter revenue.
“We now have a US administration that is proud of our leading companies, prioritises American technology winning, and will defend our values and interests abroad,” CEO Mark Zuckerberg told investors during a call. “I am optimistic about the progress and innovation that this can unlock.”
In a separate legal development, US president Donald Trump signed a settlement agreement requiring Meta, the parent company of Facebook and Instagram, to pay around $25m. This stems from a lawsuit Trump filed against the social media company and its CEO, Zuckerberg, in 2021, following the suspension of his accounts after the 6 January Capitol riots.
Zuckerberg told investors that while there’s much to learn from DeepSeek, it’s still too early to form "a really strong opinion" on its impact on the future of AI. “If anything, I think the recent news has only strengthened our conviction that this is the right thing for us to be focused on,” he added.
Shares Microsoft plummeted by over 4.5% in pre-market trading as the tech company disappointed investors with slower growth in its core business, Azure Cloud, despite exceeding market expectations for profit and revenue.
For Microsoft’s fiscal second quarter, which ended in December, group revenue rose 12% year-on-year to a record $69.6bn, surpassing analysts' expectations of $68.9bn. Net income climbed 10% to $24.1bn, also ahead of the consensus estimate of $23.5bn.
The company’s artificial intelligence-focused segment posted a 31% revenue growth, though this was a slight slowdown from 33% in the previous quarter. CFO Amy Hood explained in an interview that Microsoft’s data centre capacity is currently insufficient to meet customer demand, which has impacted growth.
She projected that Azure Cloud would grow between 31% and 32% in the current quarter, signalling flat growth compared to prior periods.
Microsoft’s Productivity and Business Processes segment, which includes Office productivity software subscriptions and LinkedIn, posted $29.44bn in fiscal second-quarter revenue.
Sales of devices and of Windows operating system licenses from device makers were up 4%. Microsoft also invested an additional $750m into OpenAI during the quarter.
DeepSeek’s recent innovation signals the commoditisation of artificial intelligence, said Microsoft chief executive Satya Nadella.
DeepSeek’s R1 model had demonstrated “real innovation”, including matching the performance of the OpenAI’s o1 model, he added.
“We are going to see that all get commoditised and it’s going to get broadly used. And the big beneficiaries of any software cycle like that is the customer.”
IBM reported fourth-quarter earnings on Wednesday that exceeded Wall Street’s expectations for both earnings and revenue. Shares surged as much as 10% in extended trading before retreating slightly, to 9% at the time of writing.
The company reported net income of $2.92bn, or $3.09 per diluted share, down from $3.29bn, or $3.55 per share, in the same period last year.
Looking ahead, IBM projected a full-year growth of about 5% in constant currency, along with an expected $13.5bn in free cash flow for 2025.
For the quarter, IBM’s overall revenue rose 1%. For the full year, the company’s revenue increased by 1%, reaching $62.8bn. The software segment saw solid growth, rising 8%, while infrastructure revenue dropped 4%.
IBM’s software division grew by 10% year-over-year to $7.9bn, driven in part by strong demand for artificial intelligence technology and solid performance from its Red Hat Linux operating system.
However, revenue from IBM’s consulting division fell 2% to $5.2bn for the quarter.
CEO Arvind Krishna said: “Clients globally continue to turn to IBM to transform with AI.”
BT Group reported a rise in profit for the third quarter, driven by effective cost control, despite a decline in revenue. However, it would appear investors are unconvinced, with shares down by 3.6%
For the three months ending in December, the company’s pre-tax profit increased by 1% to £427m, while adjusted earnings grew 4% to £2.1bn, BT announced on Thursday. Revenue, however, dropped 3% to £5.2bn, as strong fibre rollout and price hikes were offset by challenging market conditions outside the UK.
BT noted that its fibre-to-the-premises build rate had surpassed one million homes for the fourth consecutive quarter, bringing the total to 17 million homes, or over half of the UK, connected.
Openreach, the company's network division, saw a 1% increase in revenue to £1.5bn, although both consumer and business sales declined.
Cost-cutting initiatives remained on track, with BT citing lower energy consumption, reduced labour costs, and a drop in Openreach repair volumes as contributing factors.
“Our ongoing modernisation continues at pace,” said chief executive Allison Kirby. “The benefits from our cost transformation more than offset lower revenue outside the UK and weak handset sales.”
BT also noted progress toward becoming more UK-focused, including the sale of its data centre business in Ireland. The company remains on track to meet its financial outlook for the year, with an expected cash flow inflection to around £2bn by 2027 and £3bn by the end of the decade.
Richard Hunter, head of markets at Interactive Investor, said: “BT remains busy ringing the changes and there are signals that the optimism which has followed the company more recently is becoming increasingly justified.”
