Episode summary
Instant Reaction Earnings Roundup: Microsoft, Meta & Tesla Deliver Results | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Carol Massar, Tim Stenovec · Guests: Anurag Rana, James Cakmak, Kurt Wagner, Steve Man
Summary
Microsoft’s quarter was strong on the surface but failed to clear a very high bar. Revenue and intelligent cloud results beat estimates, and Azure growth came in at 38%, but several speakers argued investors wanted a bigger beat to justify the stock’s AI-heavy valuation and rising capex. The concern was less about the quarter itself than whether Microsoft’s AI investments and its dependence on OpenAI can translate into faster growth in coming quarters.
Meta told a different story: revenue beat expectations, first-quarter guidance was strong, and the company raised its 2026 capital spending outlook to $115 billion to $135 billion. The discussion centered on whether AI is already improving the ads business through better targeting and more efficient ad creation, helping explain why investors were willing to tolerate even larger spending plans.
Tesla’s main surprise was its planned $2 billion investment in xAI. The panel framed that as another layer of Elon Musk’s tightly linked ecosystem, alongside a quarter marked by lower revenue and renewed emphasis on robo-taxi ambitions. IBM also stood out positively, with software strength, better-than-expected growth, and rising free cash flow reinforcing the view that its acquisition-led strategy is working.
Key takeaways
- Microsoft’s Azure growth of 38% matched expectations, but the market wanted a bigger upside surprise, according to Anurag Rana and James Cakmak.
- Anurag Rana said Microsoft’s long-term risk is its OpenAI dependence, including the need to build more of its own model capability over time.
- Meta’s stronger-than-expected revenue and Q1 guide were paired with a 2026 capex plan of $115 billion to $135 billion, which Kurt Wagner said investors largely accepted because ad growth is still robust.
- Tesla’s $2 billion xAI investment added a new strategic angle, but Steve Man said the bigger story is the company’s push to codify robo-taxi plans in nine cities.
- IBM’s software momentum and higher expected cash flow led Anurag Rana to call the turnaround execution strong and better than expected.
Notable quotes
“the fact that they only met Azure uh growth rates which was 38%. I think that's probably weighing on the stock”
“we think at least on the enterprise side having a core system of record something like you know the one that's sold by SAP or a workday they're far more important”
“it does Microsoft's quarter includes net gains from investments in open AI. Are we going to get a little bit more of a a picture about that”
“I think a lot of the investors are expecting, you know, the timeline of that scaling up on Robo Taxi and I think we're seeing that”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world. — Carol Masser along with Tim Stanovic live in our Bloomberg Interactive Broker studio. as we mentioned uh those big three of the mag seven reporting uh right now Meta is up about four and a quarter% Microsoft down about 5% off its uh aftermarket lows Tesla has also bounced back
I want to bring in Bloomberg Intelligence senior technology analyst Anurag Rana he joins us in Bloomberg's Chicago bureau uh Microsoft down 5% right now taking a look at uh some of the headlines Anuag that crossed I know you've only had a few minutes to actually look at these second quarter Azure and other cloud revenue. XFX was up 38% meeting estimates. Second quarter revenue for the company beat estimates at 81.27 billion.
Uh second quarter intelligent cloud revenue beat estimates. Uh we also saw 40 3 Microsoft 365 commercial seats grew 6%. 45% of commercial RPO was driven by open AI commitments.
Commercial remaining performance obligation $625 billion. What's not to love here? Is it all about capex?
No, I think it's usually high expectations and you know the fact that they only met Azure uh growth rates which was 38%. I think that's probably weighing on the stock because you know one would have expected them to blow out that number it has been around 39% the last couple of quarters. So I think that's where a little disappointment could be.
But that could also be because of supply constraints. That's something we have highlighted in our uh research before. But you know if you look at some of the other numbers such as RPO you mentioned above 600 billion that's very impressive and we already know the capex was going to go up.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- earnings reactions
- ai investment outlook
- cloud growth
- ad revenue outlook
- autonomous/ai cash infusion
Companies and tickers mentioned
- TSLA
- MSFT
- META
- Tesla
- Microsoft
- Meta Platforms
- xAI
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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