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Intel Stock Rises on Revenue Beat as CEO Search Takes Center Stage

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Intel shares climbed 1.7% in premarket trading on Friday following better-than-expected quarterly revenue, despite the company’s ongoing struggles in the AI-driven chip market. Investors remain focused on Intel’s search for a new CEO after the abrupt departure of Pat Gelsinger, whose four-year turnaround plan was cut short amid persistent challenges.

While Intel’s revenue exceeded modest expectations, its forecast for the current quarter fell below estimates. Analysts at Bernstein noted that investors have become “numb” to Intel’s struggles, suggesting that leadership changes are now the primary concern rather than financial performance.

The company has appointed CFO David Zinsner and senior executive Michelle Johnston Holthaus as interim co-CEOs while the board seeks a long-term replacement. Meanwhile, Intel continues to lose market share to competitors like Advanced Micro Devices (AMD), particularly in the AI sector, where it missed key investment opportunities, including OpenAI.

With AI chip demand soaring, companies are prioritizing specialized processors over traditional server chips, further limiting Intel’s growth. Analysts at Jefferies remain skeptical about Intel’s ability to turn things around, citing its struggling foundry business and lack of major customers.

Despite these challenges, Intel’s stock has fallen 60% over the past year, while AI chip leader Nvidia has surged 171%. As the CEO search progresses, investors will be looking for a strategic vision that can help Intel regain its competitive edge.

Microsoft Shares Drop as Cloud Outlook Disappoints, Meta Gains on AI Optimism

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Microsoft saw its shares tumble 6% on Thursday after its artificial intelligence (AI) investments failed to significantly boost cloud revenue. Meanwhile, Meta’s stock rose 4% as CEO Mark Zuckerberg reassured investors of strong growth potential, calling 2024 a “really big year.”

Both tech giants defended their heavy AI spending following concerns sparked by Chinese AI startup DeepSeek’s recent advancements in low-cost AI models. However, while Meta continues to show strong ad revenue growth—justifying its AI investments, according to Evercore analyst Mark Mahaney—Microsoft’s Azure cloud platform has struggled.

Microsoft missed market estimates for Azure’s quarterly revenue growth and provided a third-quarter forecast below expectations. The company had previously promised a second-half rebound, but analysts now express skepticism.

“The second-half re-acceleration story for Azure is not playing out,” said Barclays analyst Raimo Lenschow, adding that Microsoft prioritized AI workloads over core Azure functions, delaying the expected growth recovery.

For Meta, a stronger-than-expected 21% revenue increase eased investor concerns about Zuckerberg’s aggressive AI spending plans, which could reach $65 billion this year. Analysts remain bullish, with Barton Crockett of Rosenblatt stating that “Meta might have more benefits to show from AI than anyone.”

At least 15 brokerages raised their price targets on Meta, which saw a 65% stock gain in 2023, the largest among Big Tech firms. The stock’s rally was set to add over $80 billion to its market value.

Conversely, Microsoft was on track to lose about $182 billion in market capitalization. J.P. Morgan analyst Mark Murphy noted that Microsoft “did not recommit to its Azure second-half outlook the same way it did 90 days ago,” weakening confidence in the company’s cloud growth trajectory.

 

Tesla Shares Rise as Musk Promises Cheaper EVs and Autonomous Ride-Hailing

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Tesla shares climbed more than 2% on Thursday after CEO Elon Musk announced plans to launch lower-cost electric vehicles (EVs) in the first half of 2025 and begin testing an autonomous ride-hailing service in June. These commitments helped investors look past a weaker-than-expected fourth quarter, which saw declining revenue and shrinking margins due to delayed model upgrades and rising competition.

Despite Tesla’s first annual decline in deliveries in 2024, the company assured investors that its vehicle business would return to growth in 2025. However, Tesla did not reaffirm Musk’s earlier forecast of a 20-30% sales increase for next year.

Morgan Stanley analysts noted that Tesla is shifting from being a traditional automotive company to a diversified player in AI and robotics. Investors remain optimistic, especially as Musk’s support for U.S. President Donald Trump could lead to more favorable regulatory conditions for Tesla’s robotaxi ambitions.

Musk revealed that Tesla will begin unsupervised testing of its autonomous ride-hailing service in Austin, Texas, though he did not provide specific details on how it would function. The company also did not share pricing details for its upcoming affordable EV models.

If Tesla’s stock gains hold, its market value could rise by approximately $28 billion. The stock surged 62.5% in 2024 and is currently trading at 118 times its 12-month forward earnings, significantly higher than Ford (6.07) and General Motors (4.48).

At least 19 brokerages have raised their price targets for Tesla stock, with a median target of $300, up from $278 at the end of December. Analysts believe that Tesla’s growth will be fueled by Full Self-Driving technology and the introduction of an affordable EV. However, some experts remain cautious about Musk’s timeline for launching robotaxis, citing regulatory challenges, particularly in Europe and China.

Tesla also announced an increase in its capital expenditure forecast, expecting to spend over $11 billion in 2025 and the following two fiscal years.