Key Takeaways
- Tesla (TSLA) reported mixed Q3 FY25 earnings, beating revenue estimates with $28.10 billion but missing on adjusted EPS at $0.50 against an estimated $0.54.
- US Treasury Secretary Scott Bessent confirmed a planned "pull-aside" meeting between President Trump and China's Xi Jinping in South Korea, alongside announcing impending "substantial" new Russia sanctions.
- The Nasdaq closed down 0.98%, reflecting broader market caution, while Beyond Meat (BYND) shares experienced a volatile surge of up to 86% before paring gains, driven by meme stock activity and a Walmart expansion.
- Reddit (RDDT) launched a copyright lawsuit against AI search engine Perplexity, accusing it of unlawfully scraping data.
Tesla's Q3 FY25 Performance: Revenue Beat, EPS Miss
Tesla (TSLA) delivered a mixed financial report for the third quarter of fiscal year 2025, with revenue surpassing analyst expectations but adjusted earnings per share falling short. The electric vehicle giant posted $28.10 billion in revenue, beating the estimated $26.36 billion. However, adjusted EPS came in at $0.50, missing the $0.54 estimate and down from $0.62 year-over-year. GAAP EPS also declined to $0.39 from $0.62 in the prior year.
Despite the EPS miss, Tesla showed strength in other areas, with a gross margin of 18%, exceeding the estimated 17.2%. Operating income was reported at $1.62 billion, slightly below the $1.65 billion estimate. Notably, free cash flow surged to $3.99 billion, significantly outperforming the estimated $1.25 billion. The company's ability to generate strong free cash flow and improve gross margins suggests underlying operational efficiency, even as profitability per share faced headwinds.
Bessent on Geopolitics: Trump-Xi Meeting and Russia Sanctions
US Treasury Secretary Scott Bessent provided key updates on international diplomacy and economic policy. He announced that President Trump and Chinese President Xi Jinping are scheduled for a "pull-aside" meeting in South Korea. Bessent confirmed his own travel plans, stating he would accompany Trump to Japan before attending the APEC Conference in South Korea. He also indicated plans for two days of comprehensive talks with Chinese officials in Malaysia.
Bessent emphasized the importance of the upcoming Trump-Xi meeting, hoping to avoid wasting the first such encounter of Trump's second term. He also voiced strong criticism of China's rare earth licensing regime, calling it "unworkable and unacceptable." Furthermore, Bessent revealed that a "substantial pickup in Russia sanctions" would be announced either after the close of markets today or first thing tomorrow morning. These diplomatic and economic maneuvers highlight ongoing tensions and strategic realignments on the global stage.
Market Movements: Nasdaq Dips, Beyond Meat Surges
The Nasdaq composite index closed down 224.22 points, or 0.98%, settling at 22,729.45 (unofficial). This decline reflects a cautious market sentiment amidst various corporate earnings and geopolitical developments.
In contrast, shares of Beyond Meat (BYND) experienced a dramatic surge, climbing as much as 86% in Wednesday trading before giving back most of those gains. The volatile movement appears to be fueled by meme stock activity and an expanded partnership with Walmart, which will see Beyond Meat products available in over 2,000 of the retailer's stores. Such significant, rapid price fluctuations are characteristic of meme stock rallies, often detached from underlying fundamentals.
Meanwhile, Spot Palladium jumped over 3%, reaching $1,453.79/Oz. London stocks also saw gains, buoyed by inflation data that spurred bets on potential rate cuts, with Barclays benefiting from a share buyback announcement.
Reddit Sues Perplexity Over Data Scraping
Social media platform Reddit (RDDT) has initiated a copyright lawsuit against the AI search engine Perplexity. The suit alleges that Perplexity unlawfully scraped Reddit's data to train its AI system. This legal action underscores the growing conflict between content creators and AI developers over the use of proprietary data for training large language models.
In other news, a UN official stated that Israel must do "much more" to help the people of Gaza, despite an increase in aid since the ceasefire with Hamas.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.