Tesla Reports Strong Inventory Decline in Q4 2025
Tesla reported a significant drop in inventory for Q4 2025, impacted by lower deliveries and increased investments in artificial intelligence; Microsoft’s results failed to impress investors.
Tesla’s Financial Performance
Tesla generated $24.901 billion in revenue for Q4 2025, a decrease of 3.14% compared to the same period in 2024, weighed down by a decline of 11% in the automotive segment to $17.693 billion, down from $19.798 billion in 2024.
Tesla’s car sales have been sluggish in recent quarters as it faces intense competition worldwide, particularly from BYD in China. Annual revenues for 2025 stood at $94,827 billion, a decrease of 2.93% from 2024. The decline was partly due to lower vehicle deliveries and reduced regulatory credit revenue, according to the report.
Tesla’s stock rose 2% in after-hours trading following the report.
While Tesla’s primary automotive business has struggled, CEO Elon Musk has attempted to divert investor attention to other areas, promoting Tesla’s robotaxi business and its humanoid robots, Optimus, which have yet to hit the market.
Tesla’s CFO, Vaibhav Taneja, stated that investors should anticipate approximately $20 billion in capital expenditures this year, with investments in new factories, Optimus, and AI computing resources.
Tesla mentioned that it has started preparing for the production of its upcoming Cybercab, a two-seater autonomous vehicle “specifically built” without a steering wheel or pedals.
Revenues from energy generation and storage increased by 25% to $3.837 billion, compared to $3.061 billion in 2024.
Microsoft Falls in After-Hours Trading
Microsoft’s stock fell 8% in after-hours trading following the release of its report showing a slowdown in cloud growth.
Microsoft’s Q4 2025 revenue reached $81.273 billion, a 16.72% increase from the same period in 2024. The services segment reached $64.822 billion and accounted for 79.76% of total revenue during the period, with the remainder attributed to product revenues.
Regarding forecasts, Microsoft predicted Q1 2026 revenue between $80.650 and $81.750 billion. The company’s outlook for Azure cloud growth was 37%, falling short of consensus expectations.
Microsoft’s Intelligent Cloud segment, which includes Azure cloud infrastructure, generated $32.907 billion in revenue, an almost 29% increase compared to the same period last year.
Similar to its cloud rivals, such as Amazon, Microsoft has been building data centers packed with AI-specific chips capable of running generative AI models. Microsoft also funds CoreWeave and Nebius through leasing.
Meta Outperforms Expectations
Meta exceeded expectations and reported better-than-expected 2026 forecasts, boosting its stock on the Nasdaq by 10% in extended trading.
Mark Zuckerberg’s company reported $59.893 billion in revenue, a 24% increase from the same period in 2024.
Meta stated that its advertising business generated $58.137 billion in revenue in Q4 2025, accounting for nearly 97% of the company’s total revenue during that period.
Meta reported that daily active users reached 3.580 billion in Q4 2025, in line with Wall Street estimates.
For Q1 2026, Meta expects revenue between $53.500 and $56.500 billion.
Key Questions and Answers
- What caused Tesla’s revenue decline? The decrease was primarily due to lower vehicle deliveries and reduced regulatory credit revenue.
- How much did Tesla’s Q4 2025 revenue drop compared to 2024? Tesla’s Q4 2025 revenue was $24.901 billion, a decrease of 3.14% from the same period in 2024.
- Why did Microsoft’s stock fall after hours? Microsoft’s stock fell 8% in after-hours trading following the release of its report showing a slowdown in cloud growth.
- What is the outlook for Azure’s cloud growth? Microsoft predicted a 37% quarterly growth rate for Azure, which fell short of consensus expectations.
- How did Meta perform in Q4 2025? Meta reported a 24% increase in revenue to $59.893 billion, with advertising generating nearly 97% of total revenue.
