Podcast Summary: "Instant Reaction Earnings Roundup: Microsoft, Meta & Tesla Deliver Results"

Podcast: Bloomberg Intelligence
Hosts: Tim Stanwick, Carol Massar
Date: January 28, 2026
Featured Analysts: Anurag Rana (Bloomberg Intelligence), Kurt Wagner (Bloomberg News), James Choc Mok (Clockwise Capital), Steve Mann (Bloomberg Intelligence), Ed Ludlow (Bloomberg Tech)

Episode Overview

This episode provides an immediate, in-depth analysis of fourth-quarter earnings from three of the tech sector’s most watched companies: Microsoft, Meta Platforms, and Tesla (with side coverage of IBM’s earnings). The hosts and invited market experts dissect the headline numbers, market reactions, and strategic shifts, particularly around AI investment, cloud business, and emerging business models. The conversation is fast-paced, candid, and deeply analytical—essential listening for any market follower or tech watcher.

Key Discussion Points & Insights

1. Microsoft Earnings: Cloud Growth, OpenAI Dependence & Valuation Pressure

• Azure Growth & Market Expectations
  • Azure and cloud revenue up 38% (ex-currency), meeting but not beating expectations.
  • “One would have expected them to blow out that number... I think that's where a little disappointment could be.” – Anurag Rana [03:10]
• OpenAI Relationship & RPO
  • Microsoft’s backlog (RPO) at $625 billion, partly driven by large OpenAI-related commitments.
  • Uncertainty about OpenAI’s funding capacity and what happens to Azure’s growth if that changes.
  • “What happens when the OpenAI relationship breaks through... that's the only big risk for Microsoft in the long run.” – Anurag Rana [07:36]
• Competitive Pressures from Open AI & Open Source
  • Anthropic’s Claude and other open-source AI tools are putting margin and competitive pressure on all software companies.
  • “...the entire software sector has been absolute under threat because of a lot of what you are mentioning, whether it's cloud or whether it's open air tools or whether it's open source.” – Anurag Rana [05:02]
• Valuation and Investor Sentiment
  • Microsoft trades at high multiples; results were “ho-hum,” in line rather than surpassing expectations.
  • “...you got to deliver the growth and it’s all about the growth relative to expectations. And in this case it was just inline on Microsoft.” – James Choc Mok [12:33]

Notable Segments

• Azure growth discussion: [02:21–03:47]
• OpenAI relationship and risk: [04:01–08:08]
• Industry threats and software margins: [05:02–06:21]
• Capex, RPO, and sustainable growth: [07:36–08:42]

2. IBM’s Surprise Outperformance

• Software-Led Growth
  • IBM’s software business saw 12% growth, beating expectations; revenue topped estimates.
  • “I was a bit surprised, actually... software in double digits. I mean, we were not expecting that.” – Anurag Rana [09:41]
• Strategic Acquisitions & Cash Flow
  • Growth partly from M&A (Red Hat, Hashicorp, Confluent), with a disciplined approach to valuation and synergy.
  • “There's nothing wrong in growing through acquisitions if you pay the right amount.” – Anurag Rana [10:25]
• AI Bookings & Consulting Struggles
  • AI bookings exceeded $12.5B, mostly from the consulting unit, though consulting’s total growth lagged.
  • “Even with consulting growing only 1%, their total company growth rate was 9%...that’s something to be proud of.” – Anurag Rana [11:29]

Notable Segments

• IBM earnings breakdown: [08:56–12:04]
• AI bookings and consulting: [10:57–11:29]

3. Meta Platforms: AI Strategy, Ad Business & CapEx

• Strong Revenue & User Growth
  • Q4 and Q1 projections both beat estimates; shares jump as investors embrace the AI narrative.
  • “It’s pretty much all good news, especially if you believe in this AI vision that Mark Zuckerberg has.” – Kurt Wagner [15:33]
• Spending & CapEx Narrative
  • CapEx for 2026 forecast at $115–135B (vs. $111B estimate), but investors aren’t reacting negatively as they did last quarter.
  • “They’re just seeing this ads business that is completely churning money out. And so if you feel that you have the money coming in, maybe you stomach those higher numbers...” – Kurt Wagner [16:46]
• AI Impact on Ads
  • AI is enabling higher ad pricing through better targeting; Meta is selling this narrative to market.
  • “That rise in average cost per ad... That’s because people are getting more granular, more targeted... AI can truly improve the ads business.” – Kurt Wagner [18:16]

Notable Segments

• Meta earnings reaction: [15:33–17:35]
• CapEx & investor perception: [16:42–16:46]
• AI in ads: [17:35–19:03]

4. Tesla: AI Bets, Robotaxi, and Challenging Auto Numbers

• Surprise: $2B Investment in X.AI
  • Tesla invests in Elon Musk’s AI startup, further intertwining his ventures; investors are split.
  • “Tesla's done it. Not only are they investing $2 billion... but they now have an agreement in price, what they call a framework to work on technology and product together.” – [20:47]
• First Annual Revenue Decline Ever
  • Revenues down 3% year-over-year as vehicle sales and regulatory credits fell; core auto business struggles.
• Focus Shifting to “Physical AI” and Robotaxi
  • Investor deck signals emphasis on future robotaxi and robotics businesses over traditional auto sales.
  • Limited pilot underway in Austin, with expansion to nine cities. However, skepticism on timelines persists.
  • “He’s making a big commitment to the investors... scaling up of that business and to drive a new revenue stream for the company. And it looks like it's happening sooner than later now.” – Steve Mann [29:20]
• Valuation Risks and Volatility
  • High expectations mean any disappointment can quickly lead to big stock moves (reference to Intel's fall).
  • “...with these valuations being where they are, not only from a stock perspective, but the market perspective, one little thing can cause things to break.” – James Choc Mok [24:26]

Notable Segments

• Tesla/X.AI investment: [20:01–22:40]
• Robotaxi plans & reality: [27:14–29:20]
• Tesla’s future vision & market skepticism: [30:29–32:13]

5. Recurring Themes & Market Sentiment

• AI Arms Race:
  • Across all companies, heavy CapEx on AI infrastructure is now expected—but only justified if it clearly translates into strong, sustainable revenue growth.
  • Quote: “Spend more on investment and infrastructure, but show us very strong top line growth as a direct result of it.” – [34:03]
• Investor Discipline:
  • Across Microsoft and Tesla, both company executives and outside investors express caution given lofty valuations.
  • Skepticism remains high around bold promises, especially with Elon Musk and timelines for disruptive tech.

Memorable Quotes & Moments

• On Microsoft meeting Azure growth expectations:
  “That's probably weighing on the stock because, you know, one would have expected them to blow out that number.” – Anurag Rana [03:10]

• On industry-wide software margin compression:
  “The entire software sector has been absolute under threat... valuations of software companies... have been completely destroyed over the last six to nine months.” – Anurag Rana [05:02]

• On Meta’s AI messaging:
  “...this is a company that is going to absolutely full steam ahead into AI...” – Kurt Wagner [15:33]

• On the difference in Meta investor sentiment:
  “If you feel that you have the money coming in, maybe you stomach those higher [CapEx] numbers...” – Kurt Wagner [16:46]

• On Tesla’s pivot to AI/robotaxi:
  “He’s making a big commitment to the investors... scaling up of that business and to drive a new revenue stream for the company. And it looks like it’s happening sooner than later now.” – Steve Mann [29:20]

Timestamps for Key Segments

• Microsoft Azure & Cloud Discussion: [02:21–03:47]
• OpenAI Dependency and Risks: [04:01–08:08]
• Software Sector Headwinds: [05:02–06:21]
• IBM: Unexpected Software & AI Growth: [08:56–12:04]
• Meta: AI CapEx & Ads Growth: [15:33–19:03]
• Tesla/X.AI Investment & Robotaxi: [20:01–22:40], [27:14–29:20]
• Investor Reactions & Meta-Analysis: [32:13–34:38]

Tone and Language

The episode is rapid-fire and highly analytical, blending skepticism and pragmatism with genuine excitement for technological transformation. There’s a recurring throughline of market discipline given how far valuations have run — high spending must drive real, measured growth or patience may soon run out. Occasional sports banter and speaker camaraderie keep the conversation grounded and lively.

Takeaways for Non-Listeners

• Microsoft: Solid numbers, but not enough to please high expectations—watch for supply chain impacts on cloud and potential OpenAI dependency risk.
• Meta: Wall Street is rewarding immediate revenue strength and a data-driven AI positioning even as CapEx surges; clear proof that AI investments are trickling into ad effectiveness.
• Tesla: Auto sales weakness is downplayed as the narrative pivots to an ambitious future in AI and robotaxis. Sizable bets on X.AI signal even deeper Musk-verse integration, but delivery and timing remain major unknowns.
• IBM: “Old tech” impresses with software and AI bookings, leveraging smart acquisitions.

In summary:
The Mag 7’s fortunes are increasingly tied to their ability to turn AI investment into real business results. This episode captures the nascent shifts, market doubts, exuberance, and the deep analysis shaping investor sentiment in early 2026.