Apple, Facebook, Tesla Report Earnings Beat
Apple revenue tops $100 billion for the first time; Facebook warns of impact from Apple privacy changes; Tech earnings could supercharge a greedy stock market.

Apple
Apple delivered its largest quarter by revenue of all time on Wednesday at $111.4 billion in its first-quarter earnings report for fiscal 2021. It's the first time Apple crossed the symbolic $100 billion mark in a single quarter, and sales were up 21% year over year.
Apple delivered its largest quarter by revenue of all time on Wednesday at $111.4 billion in its first-quarter earnings report for fiscal 2021. It's the first time Apple crossed the symbolic $100 billion mark in a single quarter, and sales were up 21% year over year.
Apple's results for the quarter ending in December weren't just driven by 5G iPhone sales. Sales for every product category rose by double-digit percentage points. Apple's earnings per share and sales handily beat Wall Street expectations.
Apple's other products category, which includes Apple Watch and headphones such as AirPods and Beats, was up 29% from last year to $12.97 billion, even as people are spending less time commuting and traveling. Apple released a high-end set of headphones, AirPods Pro Max, in December, with a steep $549 suggested price.
Macs and iPods, the Apple devices most likely to be used for remote work and school, were also up this quarter. Apple released new Mac computers powered by its own chips instead of Intel processors in December to positive reviews that said they were superior in terms of power and battery life to the old models.
Apple's services business, which the company has highlighted as a growth engine, was up 24% year over year to $15.76 billion. That product category is a catch-all: It includes the money Apple makes from the App Store, subscriptions to digital content such as Apple Music or Apple TV+, licensing fees paid by Google to be the iPhone's default search engine and AppleCare warranties.
Facebook reported fourth-quarter earnings on Wednesday that were better than expected against a backdrop of mushrooming political and regulatory challenges — but cited "significant uncertainty" as a problem for its massive ad revenue-generating machine.
The company said that it benefited in 2020 by a shift toward online commerce and products during the pandemic. Facebook warned that these trends may moderate or reverse and "could serve as a headwind to our advertising revenue growth."
The company also warned Apple's privacy changes in iOS 14, which could impact Facebook's ability to target ads, could start to affect its business late in the first quarter.
Zuckerberg said Facebook increasingly views Apple as one of its biggest competitors.
"Apple may say they're doing this to help people, but the moves clearly track their competitive interests," Zuckerberg said. "This dynamic is important for people to understand because we and others are going to be up against this for the foreseeable future."
In the U.S. and Canada, Facebook's user base fell to 195 million daily active users from 196 million a quarter earlier. This is the second quarter in a row that the company lost users in the U.S. and Canada.
Its user base in Europe increased to 308 million daily active users, its first growth in the region after three quarters at 305 million.
Tesla
Tesla reported quarterly results after the bell, missing analysts' estimates on earnings but notching another profitable quarter for the electric vehicle and solar business.
Both deliveries and production numbers set a new record for the maturing electric car company, seen as a triumph in a year when auto sales and factory operations were dampened by a global pandemic.
Looking ahead, Tesla said it would begin producing its newest model -- the crossover SUV known as the Model Y -- at new plants in Austin, Texas, and Brandenburg, Germany, in 2021. Tesla intends to incorporate its own new "tabless" battery cells, which it unveiled at an annual shareholder meeting and battery presentation in September last year in those vehicles.
Earnings from some of the biggest U.S. technology companies could push the market to new highs as talk of a stock bubble continues to ripple through Wall Street.
Greed has returned to markets, according to the Fear & Greed Index from CNN Business. Two of the metrics for determining market sentiment — stock price strength and market momentum — indicate "extreme greed."
Strong results from internet giants will only feed the pro-stock narrative, pushing the tech-heavy Nasdaq Composite to new heights. Talk of a bubble is only due to increase.
"We don't think that we are yet in the late stage of a bubble in the overall stock market," John Higgins, the chief market economist at Capital Economics, said in a note to clients Tuesday. "Nonetheless, we acknowledge that the surge in the Nasdaq Composite suggests we may at least be in the early stage of a bubble again, even if the climb in the index is partly justified by the boost to earnings of companies in the technology sector from the pandemic."
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