Earnings season has begun, so I’d like to explain how I handle approaching earnings dates. I generally only hold winning stocks through earnings if I have a cushion of at least a 15% gain from my purchase price. Otherwise, I look up the earnings date and sell the stock before that date. I’m happily and comfortably retired, so I don’t need the added volatility.
META, one of the stocks I personally own, and which is in the Simulation 1 portfolio, beat expectations on all fronts. Q4 '24 revenue of $48.4B beat estimates by 3%. Their $6.78 EPS crushed estimates by $1.24. They also beat FCF estimates by 42%. Zuck said that DeepSeek’s model validates Meta’s approach of building open source LLMs like Meta’s Llama model.
In other news, Microsoft (MSFT) said that revenues from their AI services (Copilot, etc), grew 175% YoY to an annual run rate of $13B. They guided 32% growth for Azure in Q3, as they don’t have enough data center capacity to meet demand. Their revenue came in at $69.6B for Q4, which was 12.3% YoY and EPS came in at $3.23, surpassing expectations of $3.10.