120 companies on the S&P 500 are reporting earnings this week, but all eyes are on just two: Tesla and Alphabet. Elon Musk’s golden child electric vehicle company drops its latest numbers on Tuesday, while Alphabet is up next on Thursday.
The two tech titans are struggling to relive their glory days as core members of the exclusive Magnificent Seven club. Just look at Tesla, which is down a staggering 40% year to date—making this its worst quarter since March 2022.
The elephant in the Situation Room is Musk’s pivot away from his businesses and toward the political arena. His role leading DOGE has been making headlines but distracting him from running Tesla, analysts and shareholders alike have argued.
But with rumors swirling that he could be stepping back from DOGE, investors will want to hear from the man himself about where plans to focus his efforts. Barclays analyst Dan Levy just cut his price target on Tesla from $325 to $275 today, but noted that Musk spending less time in Washington could trigger a turnaround.
Suffice to say there are a lot of questions swirling around Tesla these days. “On the call Tuesday Musk needs to lay out for investors the timing/rollout of unsupervised FSD in Austin this summer, when does the new lower cost vehicle hit the production line and does it depend on tariff relief, how will Tesla pivot and turn the growth story for 2025 in a positive direction after a disastrous 1Q, and it's time to lay out the timeline/hard facts around autonomous and robotics/Optimus rollout over the next 6-12 months,” wrote Wedbush analyst Dan Ives in a note today.
Making sense of market moves
Stay up to date on the latest market news with daily analysis of the investing landscape, served up Brew-style.
Musk will also need to explain how tariffs will affect Tesla’s production line with more specificity than just calling White House advisor Peter Navarro “dumber than a sack of bricks.”
Antitrust questions for Alphabet
Meanwhile, Alphabet might want to Google “how to woo investors,” because this tech giant has been struggling lately. Shares are down 22% year to date, far underperforming the rest of the S&P 500.
Analysts and investors will certainly be eager to hear what management has to say about a recent US District Court ruling that Google has maintained illegal monopolies, which could potentially lead to a breakup of Google itself.
Google’s ad business will also be in the spotlight as the entire online advertising industry adjusts to a potential tariff-induced downturn in advertising spending from giants like Temu and Shein.
Of course, it wouldn’t be tech earnings season without AI dominating the conversation. Shareholders will want updates about Google’s AI chatbot Gemini and how it's faring against competition such as Open AI’s ChatGPT. Investors will also be closely monitoring how the company is spending the $75 billion it allocated toward AI data centers and servers this year.
A bright spot for the tech giant could be the success of YouTube (which Alphabet acquired in 2006), which has grown to become the most-watched streaming service on television and a key revenue generator for Alphabet.
The big picture: The majority of analysts covering Alphabet have a “buy” rating on the stock, while Tesla’s consensus rating among analysts is a slightly less enthusiastic but still positive “overweight” rating.—LB