[Early US stock financial results, slightly turbulent] What are the implications for Tesla, Meta, Microsoft, Alphabet ~ NVIDIA?

Of the Magnificent 7, a major US tech stock, 4 companies have finished announcing financial results. Among them, Tesla showed a slightly turbulent appearance, with stock prices rising even though sales and profit declined, and Meta saw an increase in sales and profit but stock depreciation. The market price was in the first half of April when the trend of tech stock dominance was questioned, but how will the financial results of major tech stocks direct the future? This time, we focused on the 4 companies that have already announced financial results, confirmed financial results highlights and management's main comments, and also examined stock price forecasts and investment implications for NVIDIA stocks.

●Key comments from CEO Elon Musk
・Accelerate the introduction of new modelsIn order to do so, the future vehicle lineup was updated. Previously, I talked about the start of production in the latter half of 2025, but now I think there is a possibility that it will be the first half of 2025, if not the latter half of this year.
・These new models, including models in the more affordable price range, can be produced on the same production line as the current model lineup.
・When asked about the “25,000 dollar car timeline,” Musk responded, “I'm going to talk about this in more detail on 8/8.”
・The AI-based autonomous driving system “FSD Better Edition 12” is extremely excellent, and the speed of improvements is also fast. The mileage of the “FSD Better Edition 12” exceeded 300 billion miles. We areI'm very hopeful about the road map for autonomous driving。

Stock price:12% increase on the next trading day after financial results were announced
factors：1Q results are lower than market expectations, and EV sales forecasts for 2024 are also sluggish, but CEO Elon Musk announced accelerated introduction of affordable EVs and enhanced AI, making it a buying material.

Weak performance and prospects for a slowdown in EV sales were to some extent within expectations. Investors would rather evaluate CEO Musk's intention to change strategy. Until before financial results were announced, it was reported that Tesla was planning to stop introducing affordable EVs. Comments on AI enhancements also gave investors a sense of security. CEO Musk emphasized that they are continuing to focus on autonomous driving technology, which is an “AI element” for Tesla. Stock prices have also declined due to the fact that bad materials were factored in, so reviews and purchases were carried out. It seems that there was also a short cover. Opinions are divided on the credibility and execution power of Mr. Musk's comments, but there is a possibility that details about affordable EVs will be revealed on 8/8, which may underpin stock prices.

●Key comments from CEO Mark Zuckerberg
・While capital investment and costs for AI are expanding, we are continuing to focus on efficiently operating other parts.
・However, realistically, even if many of the existing resources are concentrated on AI, theseFrom new products to big profitsisInvestments will expandThat's probably going to happen. Investments in new products have yet to be monetized.
・It is anticipated that an investment cycle spanning several years will be necessary before Meta AI and business AI are fully expanded to highly profitable services. Similar to past investments,The first signs are very positiveThat's it.
・Since infrastructure investment to support the AI roadmap is being accelerated, it is anticipated that capital investment for the full fiscal year 2024 will increase from the conventional 30 billion to 37 billion dollars to 35 billion to 40 billion dollars.

stock price: Decrease of 11% on the next trading day after financial results were announced
factors: Although 1Q results were above expectations, 2Q sales guidance fell below expectations, making it a selling material.

What has supported the company's stock appreciation was expectations for business performance expansion due to cost reduction and expansion of investment in AI. Since then, the effect of boosting performance due to cost reduction has faded, and investors are expecting AI to contribute to business results. It is for this reason that sales guidance, which appears as a sign of this, attracted attention. Additionally, CEO Zuckerberg suggested that monetization would take time, leading to profit-taking sales. Furthermore, CEO Zuckerberg cited past meta achievements and asked investors for patience. Weakness in guidance is likely to weigh on stock prices in the short term, but in the medium to long term, AI initiatives that make use of the customer base as an SNS world leader will bear fruit.

●CEO Satya Nadella's main comments
・OurAI innovation is being built and continues to build on a strategic partnership with OpenAI. Currently, over 65% of Fortune 500 companies use Azure OpenAI, a cloud service that can access the latest OpenAI technology.
・Azure regains share from competitorsI did it. There has also been an increase in earnings due to the move to Azure. The number of Azure transactions of 100 million dollars or more increased by more than 80% compared to the same period last year, and the number of transactions of 10 million dollars or more increased by more than 2 times.
・Windows Copilot can currently be used on 225 million Windows 10 and Windows 11 PCs, an increase of 2 times compared to the same period last year.

stock price: 4.4% increase due to overtime trading on 4/25
factors: 1Q results were generally strong, and it was shown that AI-related services continued to contribute to business results, which is good news.

It can be said that the huge investment in OpenAI, which developed ChatGPT, which sparked generative AI, was Microsoft's best investment for the next stage of growth. The benefits of introducing OpenAI's AI technology into our products were also shown in the current financial results. The main division was generally strong, and sales of the notable cloud business, Azure & other cloud services, increased 31% from the same period last year (AI services contributed to 7 point growth), resulting in high growth exceeding market expectations (29% increase from the same period). The use of AI products and services continues to expand, and it is expected that it will support future business expansion. It can be said that the financial results were reassuring as a stock for medium- to long-term holdings.

●Main comments from management at the financial results presentation
・What are the 1Q resultsReflects the strong performance of search, YouTube, and cloudDoing it.The contribution of AI solutions is increasing。
・There is a clear path to AI monetization through advertising, cloud, and subscriptions. A new AI premium plan called Gemini Advanced (Generative AI Service) was introduced in 1Q. The number of paid subscribers to Google One (cloud service) has exceeded 100 million.

stock price: 12% increase due to overtime trading on 4/25
factors: In addition to 1Q results exceeding expectations, dividends and share buybacks were also good news

Since there was a sense of delay compared to competitor Microsoft in the AI race, there were concerns about the impact on business results until before financial results were announced. However, the details of the current financial results have dispelled those concerns. Unexpected initial dividends and share buybacks also supported stock appreciation. When Meta announced its first quarterly dividend in the previous fiscal season, there were some calls for dividends against Alphabet. The company seemed to have responded brilliantly to that. Based on the previous experience with meta stocks, it seems that stronger than expected financial results plus dividends & share buybacks will support Alphabet's stock prices for the time being.

1) There is a possibility that NVIDIA stocks will be affected by buying tech stocks if financial results are going up, or tech stock sales if financial results are going down
Looking at the 4 companies that have been announced so far, 3 companies have higher expectations and higher stock prices, and 1 company has lower expectations and stock depreciation. In terms of ratio, it's 3 to 1, so it's good to see that the performance and stock price of major tech companies have not collapsed. Therefore, based on the situation at the beginning of financial results announcements, it is expected that confidence in major tech stocks such as NVIDIA will be maintained.

2) Capital investment plans of the four major tech companies are more important depending on NVIDIA shares
Among the four major tech companies, Meta, Microsoft, and Alphabet are NVIDIA's main customers. At this financial results presentation, all three companies indicated plans to further expand investment in AI in the future. Tesla is also expected to buy NVIDIA's AI semiconductor “H100” in large quantities this year.

At the financial results presentation, Mr. Musk said, “Over the past few months, we have been actively working to expand our core AI infrastructure. For a while, we were constrained by training. Currently, training restrictions have been removed, so progress is being made rapidly. We have introduced 35,000 H100s, or GPUs, and are actually putting them into operation. We expect it to be 85,000 units by the end of this year,” he said. Regarding this, CNBC pointed out that there is also a possibility that Tesla will emerge as NVIDIA's biggest customer.

In any case, from the capital investment plans of the four companies,Investment in AI infrastructure by major tech companies continues to expand, and demand for AI semiconductors manufactured by NVIDIA continues to be strongIt was shown that it was. It will support NVIDIA's future performance and stock price.