Davis Wilson:

Elon Musk Shutting Down Tesla Car Factory to Manufacture Robots Instead

Tesla CEO Elon Musk has made good on his threats to steer his EV maker away from his core business to focus instead on AI and its humanoid robot, Optimus.

During the company’s fourth-quarter earnings call this week, the mercurial CEO announced that “it’s time to basically bring the Model S and X programs to an end with an honorable discharge” – the clearest sign yet that Tesla is looking to get out of the car business as sales continue to circle the drain.

“We expect to wind down S and X production next quarter and basically stop production,” Musk explained. “That is slightly sad, but it’s time to bring the S and X programs to an end, and it’s part of our overall shift to an autonomous future.”

Most provocatively, Musk revealed that the company’s factory in Fremont, California, would be transformed into a production facility for Optimus, an abrupt end to well over a decade of automotive manufacturing at the facility.

The news comes amid a broader slate of genuinely disastrous sales figures at the company. Tesla just reported its first-ever decline in annual revenue, with sales faltering across three of the past four quarters.

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Enrique Abeyta:

Why Meta Is Ripping Higher After Earnings While Microsoft Craters

Two hyperscalers. Two top- and bottom-line beats. Two different reactions.

When both companies issue capex guidance that’s higher than expected and one goes up and the other goes down, it’s difficult for me to argue that the capex outlook is the key driver of either market reaction.

There’s a smattering of potential reasons for the divergent paths of Meta and Microsoft since releasing quarterly earnings reports after the close on Wednesday, which has seen the former rally while the latter gets crushed.

For one, Microsoft's cloud growth is slowing while Meta’s top line is poised to accelerate.

Azure revenues were up 38% year on year in constant currency terms, a modest sequential slowdown since Q2 2025, and management’s guidance for growth of 37% to 38% in the current quarter implies this trend is likely to continue.

The midpoint of Meta’s guidance for revenues between $53.5 billion and $56.5 billion this quarter would mark an acceleration to sales growth of 30% year on year. Since the AI boom started, its high-water mark for sales growth has been 27%.

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Ray Blanco:

Japan Lost a 5-Ton Navigation Satellite When It Fell off a Rocket During Launch

Japan’s H3 rocket found a new way to fail last month, apparently eluding the imaginations of its own designers and engineers.

The H3 is a relatively new vehicle, with last month’s launch marking the eighth flight of Japan’s flagship rocket. The launcher falls on the medium-to-heavy section of the lift spectrum. The eighth H3 rocket lifted off from Tanegashima Island in southern Japan on December 22, local time, carrying a roughly 5-ton navigation satellite into space.

The rocket was supposed to place the Michibiki 5 satellite into an orbit above the Earth. Everything was going well until the H3 jettisoned its payload fairing, the two-piece clamshell covering the satellite during launch, nearly four minutes into the flight. 

Video beamed back from the rocket’s onboard cameras showed a shower of debris surrounding the satellite, which started wobbling and leaning in the moments after fairing separation.

Investigators have a grasp of what happened, but they are still piecing together why.

So far, a probe by the Japan Aerospace Exploration Agency has found no evidence that a structural problem with the satellite itself was the root cause of the failure.

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