Recent earnings from Meta, Microsoft and Tesla underscore how the world’s largest technology companies are leaning into artificial intelligence, while facing varying degrees of pressure on fundamentals, margins and investor expectations, according to eToro.
Meta delivered a strong earnings beat, with Q4 revenue rising 24% year on year and first-quarter guidance comfortably ahead of expectations, highlighting resilient advertising demand and improving AI-driven monetisation. Daily active users across Meta’s Family of Apps increased 7% to 3.58 billion, while ad pricing rose 6% during the quarter.
Commenting on the results, Zavier Wong, eToro Market Analyst, said Meta’s aggressive AI push is becoming increasingly clear, with 2026 capital expenditure guided at USD$115–135 billion as the company builds out infrastructure and talent around its superintelligence labs. He added that for investors previously wary after the Metaverse investment cycle, management’s expectation that operating income will grow again in 2026 suggests this round of spending is being driven by real demand and supported by Meta’s powerful advertising engine.
Microsoft also posted a solid quarter, beating expectations on revenue and operating income. Revenue rose 17% to USD$81.3 billion, while Azure growth of 38% confirmed continued enterprise demand for cloud and AI services. Microsoft Cloud revenue surpassed USD$50 billion for the first time. However, shares slipped after hours as investors focused on record quarterly capex of USD$37.5 billion, which exceeded forecasts.
Wong noted that capital expenditure remains the key concern for investors, with questions around margin pressure and how large-scale AI investments are translating into monetisation. He added that while Microsoft’s deep ties to OpenAI underpin its leadership in enterprise AI, they also introduce concentration risk. For now, the company appears to be investing to meet existing demand rather than speculating on future growth, suggesting patience may be required from investors.
Tesla’s quarter was more mixed. Revenue fell 3% year on year, marking the company’s first annual revenue decline in 2025, driven by lower vehicle deliveries and regulatory credits. Adjusted EPS beat expectations, and gross margins rebounded to just over 20%, easing some pressure around pricing and costs in the core automotive business.
According to Wong, Tesla’s valuation is increasingly shaped by its long-term ambitions rather than near-term vehicle performance. The USD$2 billion investment in xAI, alongside progress in robotaxi, Optimus and energy storage, reinforces Tesla’s positioning as an AI, robotics and autonomy platform. However, he cautioned that vehicle revenues are shrinking, free cash flow is under pressure, and many of these future bets remain capital intensive and uncertain, widening the gap between today’s fundamentals and tomorrow’s promise.
