📊 Meta Is Stacking Billions

1) Nvidia Revenue By Geo 2) Starbucks Sales Keep Falling 3) Tesla Loses Steam and more!

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Happy Sunday!

This past week felt like a decade packed into a few days.

On Wednesday, in a widely expected move, the Fed left the Federal Funds Rate unchanged at 4.25%-4.5%.

  • The Fed acknowledged a solid labor market but noted that inflation remains elevated. 

  • Notably, they removed language from their previous statement that suggested progress toward their 2% inflation goal.

When asked if he had communicated with Trump, Powell said he has not.

Meanwhile, Trump took to Truth Social to blame the Fed for inflation and outlined his own plans to address it.

And last night, Trump officially signed orders imposing new tariffs—25% on all goods from Canada and Mexico and 10% on Chinese goods.

Some key data bites from this week that you should know:

In today’s newsletter:

  • 📉 Biggest Drop In One Day

  • 🌏 Nvidia Revenue By Geo

  • ☕ Starbucks Sales Keep Falling

  • 💰 Meta Is Stacking Billions

  • ☁ Microsoft Misses On Cloud

  • 🛞 Tesla Loses Steam

Let’s jump right in.

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On Monday, Nvidia came face-to-face with the boogeyman, plunging 17% on fears surrounding DeepSeek.

  • For those unfamiliar, DeepSeek is a Chinese startup whose free AI model recently skyrocketed to the top of the U.S. App Store.

  • The model has performed on par with top AI competitors while being remarkably cheaper—its API pricing is 20-40x lower than OpenAI’s.

  • Even more shocking, DeepSeek claims it trained the V3 model for just $5.6M, raising concerns over how this could impact demand for Nvidia’s chips.

The market panicked as a result.

The shockwave extended beyond Nvidia, sparking concerns across Big Tech, which has collectively poured billions into AI infrastructure via CapEx spending.

As the dust settled, two camps emerged.

  • Some, like Black Swan author Nassim Taleb, warned that an even larger drawdown, 2 or 3-times bigger, was possible.

  • But fear eased as tech heavyweights like Elon Musk and Scale AI CEO Alexander Wang suggested DeepSeek was likely using more expensive Nvidia chips than reported and underestimating its total training costs.

Microsoft CEO Satya Nadella also weighed in, citing Jevons' paradox—the idea that efficiency gains can actually drive up total demand.

Then, on Wednesday, Chinese tech giant Alibaba dropped its own bombshell—launching the Qwen 2.5 AI model, which it claims outperforms DeepSeek.

Despite the chaos, Nvidia clawed back most of its losses, ending the week down just under 4%.

Speculation remains over whether DeepSeek's training costs were truly as low as reported—or if the startup somehow accessed Nvidia’s H100 chips despite U.S. export controls on China.

This has raised serious questions.

  • Singapore now accounts for 22% of Nvidia’s revenue as of last quarter and is its fastest-growing geographic segment, with revenue compounding at a staggering 280% CAGR since Q3 2022.

  • But here’s the catch—Nvidia’s financials reflect the billing location, not the chips’ final destination.

  • In other words, a significant portion of those sales may be heading elsewhere.

The big question: Where are these chips really going?

With all the chaos going on, Sam Altman used the moment to pitch U.S. policymakers on the need for further investment in AI infrastructure.

Additionally, DeepSeek hasn’t slowed OpenAI’s ability to raise capital.

And to cap off a wild week, Nvidia CEO Jensen Huang met with President Trump at the White House for the first time on Friday to discuss DeepSeek and tightening AI chip exports.

Is Starbucks finally turning things around?

The company reported earnings on Tuesday in its first full quarter under the Back to Starbucks strategy—a plan aimed at reviving the brand.

Here’s how the numbers stacked up:

🟱 EPS: $0.69 vs. $0.67 Est.
🟱 Revenue: $9.4B vs. $9.31B Est.
🟱 Global Comparable Same-Store Sales: (4%) vs. (5.5%) Est.

Starbucks beat expectations across earnings, revenue, and same-store sales, showing early signs of progress.

  • However, global same-store sales are still declining, driven by a 6% drop in store visits.

  • On the flip side, the average ticket price increased 3%.

Margins remain under pressure, with operating margin falling 390 basis points to 11.9% due to deleverage and investments in its turnaround plan.

To regain customer loyalty, Starbucks has rolled out several changes.

  • They are adjusting its free refill policy, bringing back condiment bars, and limiting in-store workspaces for non-paying customers.

Meanwhile, its new CEO Brian Niccol, recruited from Chipotle, has already racked up a staggering $96M in compensation—for just four months on the job.

Mark Zuckerberg is ready for 2025.

  • “We continue to make good progress on AI, glasses, and the future of social media,” said Zuckerberg. “I'm excited to see these efforts scale further in 2025.”

Meta is already off to a strong start, up 15% this year. Shares briefly crossed $700 before pulling back after releasing Q4 earnings.

Here’s how the numbers stacked up:

🟱 EPS: $8.02 vs. $6.77 Est.
🟱 Revenue: $48.39B vs. $47.04B Est.
🔮 Q1 Revenue Forecast (Midpoint): $40.65B vs. $41.73B Est.

Revenue climbed 21%, while net income surged 49% during the quarter.

Family daily active people—users who engage with at least one of Meta’s apps—hit 3.35B, a 5% YoY increase.

Ad impressions grew 6%, while the average price per ad jumped 14%.

Many investors were watching to see if Meta would adjust its CapEx plans following DeepSeek’s V3 release.

  • However, the company reaffirmed its full-year 2025 CapEx forecast of $60-65B to continue scaling its generative AI efforts.

Zuckerberg also announced that Meta's Mesa Data Center is now fully operational.

Beyond AI, Zuckerberg is also making waves on the policy front.

  • During the earnings call, he stated, “We now have a U.S. administration that is proud of our leading companies, prioritizes American technology winning, and that will defend our values and interests abroad.”

While some Magnificent 7 members, like Meta, are thriving, others are struggling.

Microsoft is a prime example. Shares fell 6% after its Q2 FY25 earnings and are up just 3% over the past year—far underperforming the S&P 500.

Here’s how the numbers stacked up:

🟱 EPS: $3.23 vs. $3.11 Est.
🟱 Revenue: $69.63B vs. $68.78B Est.
🔮 Intelligent Cloud Revenue: $25.54B vs. $25.83B Est.
🔮 Q3 Revenue Forecast (Midpoint): $68.2B vs. $69.8B Est.

Despite beating on both the top and bottom line, a miss on Intelligent Cloud revenue and softer-than-expected guidance weighed on the stock.

Microsoft also projected Azure growth of 31.5% (midpoint) for next quarter, falling short of the 33.4% analysts had expected.

  • On a positive note, Productivity and Business Processes and More Personal Computing both exceeded estimates.

During the earnings call, Microsoft stated that CapEx will remain steady for the next two quarters before declining in FY26.

Tesla was one of the most closely watched names this week, having surged 114% over the past year, partly fueled by Elon Musk’s close ties to President Trump.

But the stock lost some steam after earnings, dipping before gradually rebounding.

Here’s how the numbers stacked up:

🔮 EPS: $0.73 vs. $0.76 Est.
🔮 Revenue: $25.71B vs. $27.26B Est.

Tesla missed expectations on both earnings and revenue.

Its largest segment, automotive revenue, fell 8%, largely due to a decline in vehicle average selling price.

  • However, energy generation and storage surged 113%, while services and other revenue climbed 31%.

  • Operating margin fell 204 basis points to 6.2%, reflecting pricing pressure and ongoing investments.

  • At the same time, Tesla achieved its lowest cost of goods sold per vehicle at <$35,000, marking a key efficiency milestone.

Looking ahead, Tesla expects FSD to surpass human-level safety, paving the way for an unsupervised FSD option and the launch of its Robotaxi business, slated for launch later this year.

One other notable callout?

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đŸ€ Billionaire Wishes. What America’s tech billionaires may want from Trump - BB

đŸ”ïž Policy Peak. Billionaire Steve Cohen expects the markets to top over the next few months due to Trump’s policies - RT

đŸŽ¶ Streaming Royalty. Spotify and Universal Music Group inked a new multi-year distribution agreement - SPOT

🚀 Sanctioned Stake. Billionaire Russian Oligarch Suleyman Kerimov held a take in SpaceX through a trust while he was sanctioned - BB

đŸȘ Oracle Orbit. Oracle is partnering with Starlink to provide connectivity to the Oracle Enterprise Communications Platform - ORCL

📡 Celestial Signal. Apple’s iPhones are eligible to start testing Starlink’s direct-to-cell capability that provides coverage from space - RT

🧳 Pardon Pursuit. Sam Bankman-Fried’s parents are exploring ways to secure a pardon for their son from Trump - BB

💾 X Money. X has partnered with Visa to allow peer-to-peer payments - X

🏱 Office Exodus. The Trump administration is offering buyouts to federal employees who prefer not to return to office - HRD

Courtesy of our paid partner, EarningsHub.

Notable Companies Reporting Earnings Week of February 3rd, 2025:

I use EarningsHub to track earnings, estimates, and receive AI summaries of investor calls.

If you’d like an all-in-one earnings tool and see all other companies reporting, I definitely recommend you check it out!

Major Trades Published 1/27 - 1/31. Trades may be those of family members. [Source: 2iQ]

Buys

  • Debbie Dingell (D)

    • Company: Federal National Mortgage Association ($FNMA)

      • Amount Purchased: $100K - $250K

      • Description: Corporate Bond; Maturity Date: 09/01/2054; Coupon Rate - 6% Fixed

Sells

  • No Major Sells 😼

Major Trades Published 1/27 - 1/31

Buys

  • Smithfield Foods ($SFD)

    • Insider: Long Wan (Director)

      • # of Shares Purchased: 3,200,000

      • $ Amount: $64,000,000

      • SEC Forms: [1]

  • TKO Group Holdings ($TKO)

    • Insider: Ariel Emanuel (CEO)

      • # of Shares Purchased: 347,810

      • $ Amount: $54,380,335

      • SEC Forms: [1], [2]

  • Ally Financial ($ALLY)

    • Insider: Michael Rhodes (CEO)

      • # of Shares Purchased: 25,634

      • $ Amount: $1,002,097

      • SEC Forms: [1]

Sells

  • Airbnb ($ABNB)

    • Insider: Joseph Gebbia (Director)

      • # of Shares Sold: 214,285

      • $ Amount: $27,687,054

      • SEC Forms: [1]

  • Meta Platforms ($META)

    • Insider: Mark Zuckerberg (CEO and COB)

      • # of Shares Sold: 107,763

      • $ Amount: $71,701,701

      • SEC Forms: [1], [2], [3], [4], [5]

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