Quarterly earnings reports were released for Meta, Tesla and IBM. For the social media platform and technology company Meta, it's looking positive on their ad revenue, which is their core business model. In a way, we can look at the health of their business model being ad revenue as one way of looking at the health of the economy, as businesses invest into advertising on their media platforms.
The enterprise is looking to keep pushing capital expenditure to drive the success of their array of innovative new technologies. It's also being spoken about the scrutiny on them for how their social media platforms affect youth's health and how regulation could affect future revenue. Meta shares are up around 2% at the time of writing.
Elon Musk's Tesla was a bit of a continuing narrative of how the vehicle business is struggling from the days of the high consumer demand before CEO Elon Musk got involved in various nations' national politics through tweets and various other ways. He then went into US politics, obtaining political influence, alongside the rise of the Chinese electric vehicle (EV) market exporting globally, especially the loss of sales in Asia and Europe rather than the US. It's thought that Europeans are more trusting of products from China than, say, the US consumer, as well as the issues with getting products and services on the US market through national security concerns.
Tesla may be struggling with electric vehicles currently, but Tesla is far more than just a car company. It is not an automotive company like Ford, but a tech company and one of the most speculative companies, if not the most hyped speculative company, in history. With an imaginative innovator like CEO Elon, no one wants to be left behind and not get in and be left years later with FOMO for not buying into his dreams and visions that he has proved before in history that he can pull them off and pull big bets off.
As much as that is said, it does look like the most perfect time to move towards a merger between SpaceX AI and Tesla. Just to note, as SpaceX shares came up yesterday pre-SPCX earnings report, Tesla shares came up with it. Tesla shares are down around 3% in aftermarket trading at the time of writing.
It's looking positive for legacy tech company IBM in a time when there is so much demand for computing. IBM shares are down around 4% at the time of writing.
Meta and IBM Earnings Performance
META PLATFORMS (META)
Key Figures: Revenue reached $63.1B (up 26% YoY). GAAP Diluted EPS landed at $3.83; however, excluding a $9.89B one-time legal charge for a teen mental health settlement, adjusted EPS came in at $7.40. CapEx: Narrowed full-year 2026 CapEx guidance to $135B–$145B (previously $130B–$145B) as aggressive infrastructure buildout continues.
Forward Guidance: Q4 revenue expected between $73B and $76B. Raised FY2026 total expense guidance to $175B–$179B. Negatives & Drag: Margins compressed sharply as total expenses hit 84% of revenue. Family of Apps operating income fell to $17.1B (down from $21.8B YoY), while Reality Labs continues to bleed cash with a projected $18B–$19B full-year operating loss.
Tesla Automotive and Tech Outlook
TESLA (TSLA)
Key Figures: Revenue rose slightly to $28.05B, topping $28.06B consensus. Non-GAAP EPS reached $0.48 (beating $0.45 expected). Automotive gross margin excluding regulatory credits rebounded sequentially to 18.1% (up from 16.3%). Free cash flow generated $1.5B.
CapEx: R&D and capital expenditures were heavily maintained across Super Intelligence, robotics, and energy infrastructure, keeping operating cash flow strong at $6.3B. Forward Guidance: Expects rising data center power requirements to drive record demand for Energy Storage. Target remains focused on maximum factory utilization and expanding Robotaxi/FSD rollout.
Negatives & Drag: Total vehicle deliveries fell 2.1% YoY to 486,532 units, GAAP operating income slumped to $0.7B, and management confirmed that battery availability remained the primary limiting factor in ramping auto output.
IBM (IBM)
Key Figures: Revenue expanded 5% YoY (6% at constant currency) to $17.1B, driven by an 8% surge in Software ($7.8B). Operating Non-GAAP EPS hit $2.95 (beating $2.86 consensus). CapEx & Cash Flow: Net cash from operating activities reached $11.8B YTD, with quarterly free cash flow improving to $3.0B. Raised full-year free cash flow growth guidance to +$1B YoY.
Forward Guidance: Reaffirmed full-year constant currency revenue growth of 4% to 5%, with foreign exchange expected to be currency-neutral. Negatives & Drag: Consulting revenue remained stagnant at flat YoY ($5.3B), GAAP gross margin narrowed by 50 bps to 56.8%, and total balance sheet debt rose to $63.8B following $11.4B spent on acquisitions YTD.
Market Trends and Economic Sentiment
US indices pushed higher today as a blowout earnings report from SpaceX bolstered sentiment across growth sectors. Despite the positive momentum, a rotation is underway within the S&P 500 as investors pull back from high-flying technology names in favor of energy and utilities. Federal Reserve discourse remains focused on long-term tightening, with reports suggesting the central bank could target a balance sheet reduction down to $4.5 trillion.
US Treasury yields remained in focus as the department sold $13 billion in 20-year bonds at a high yield of 5.469%. The auction comes as markets question if current bond pricing reflects a potential Fed policy mistake amid persistent inflationary pressures. Economists continue to argue for higher insurance rates to combat sticky price growth as the 20-year yield reflects cautious investor appetite.
Energy markets saw significant activity as Saudi crude exports hit a five-month high even as production touched record lows. The US government moved to tap heating oil reserves ahead of midterm elections, while Chevron announced plans to divest older Gulf assets to focus on newer projects. In the UK, the government greenlit a major North Sea gas field following years of legal battles.
Meta faced a massive $25 billion fine over user data privacy violations as Berkshire Hathaway shares reached new record highs. United Airlines saw bullish options activity despite warnings of elevated fuel costs through 2027, while Bitcoin tagged the $84.6K level as the crypto industry continues to press the SEC for clearer rules. Initial jobless claims highlight Thursday’s upcoming economic calendar.
A risk-on sentiment today, but still a bit of a choppy day today at US cash open as the NASDAQ price stayed around the open price, chopping up and down in what looked like what was to fill orders at an average price before it went up to pump up after the data and outlook released from SpaceX AI. Tomorrow's US cash open could possibly have big trading volume after earnings reports from mega-cap companies this evening, Meta and Tesla, as traders, investors and big firms look to find their next market direction to take their next position; in after-hours, share prices can bounce around post-earnings report released, it often takes till the next day before cash open that the world has digested it and have some form of sentiment on the story of that day's trade and when shares open for trading the volume can then often come in to the market.
