A Tesla Model Y is seen on a Tesla car lot in Austin, Texas, on May 31, 2023.
Brandon Bell | Getty Images
In a third-quarter financial filing out Monday, Tesla disclosed that the U.S. Department of Justice has been investigating, and in some cases issued subpoenas, to Elon Musk’s automaker regarding its driver assistance systems marketed as Autopilot and Full Self-Driving, or FSD, options; the range of the company’s electric vehicles; as well as “personal benefits, related parties,” and “personnel decisions” at the company.
The specific related parties were not listed in the filing. The term generally refers to a company’s executives, directors, largest shareholders and sometimes to other businesses they own.
The Wall Street Journal reported in August that federal prosecutors were investigating whether Tesla used company funds to design and build a “glass house project” for Musk. Last year, Reuters reported that a federal criminal investigation was underway concerning Tesla’s claims that its cars were self-driving.
Reuters has reported, and research by Recurrent and others have revealed, that Tesla’s cars frequently fail to achieve the mileage stated in range estimates and shown on the in-vehicle displays.
In the filing out Monday, Tesla also disclosed that a data breach at the company has resulted in several individual and prospective class action lawsuits filed against it. In its disclosure, Tesla wrote, “a foreign news outlet reported that it obtained certain misappropriated data.” This appears to reference Handelsblatt, a German news outlet, that reported on 100 GB of leaked “Tesla files” in May this year including thousands of customer complaints regarding Tesla’s driver assistance features.
Regulatory scrutiny at the state and federal level of Tesla, and his other companies, appears to have inspired Musk to call for “comprehensive deregulation” over the weekend. Musk is also CEO of SpaceX and owns and runs X Corp., formerly known as Twitter, as chief technology officer, among other ventures.
On the Q3 call, CEO Musk and other executives discussed Tesla’s increased R&D spending and efforts to keep the prices of its cars lower, and voiced concern that higher interest rates would dampen consumers’ ability to or willingness to buy or lease new cars.
The Q3 filing out Monday was signed by Tesla’s Chief Financial Officer Vaibhav Taneja, who assumed the role of CFO in August this year. Tesla’s former CFO Zachary Kirkhorn will be paid through his exit date, the filing out Monday revealed, but the company redacted his exit date.
Lisa Su, chair and CEO of Advanced Micro Devices Inc., during the AMD Advancing AI event in San Jose, California, on Dec. 6, 2023.
David Paul Morris | Bloomberg | Getty Images
Advanced Micro Devices shares fell 7% on Wednesday after the chipmaker under-delivered on Wall Street’s estimates for its important data center business.
Shares traded at a 52-week low and were on pace for their worst session since October.
AMD reported better-than-expected results on the top and bottom lines, but it also reported data center sales of $3.86 billion. That reflected 69% growth from a year ago but fell short of the $4.14 billion in sales expected by analysts polled by LSEG.
The key unit, responsible for selling advanced chips for data centers, has benefited in recent years from growing demand for its graphics processing units, as megacap technology companies race to develop advanced artificial intelligence tools.
Data center revenue grew 94% for the full year to $12.6 billion, with $5 billion of those sales stemming from AMD’s AI-focused Instinct GPUs. The company is the second-largest producer for gaming after Nvidia, which has triumphed as the market leader in AI chips and ballooned in value to a nearly $3 trillion market value.
“We believe this places AMD on a steep long-term growth trajectory, led by the rapid scaling of our data center AI franchise from more than $5 billion of revenue in 2024 to tens of billions of dollars of annual revenue over the coming years,” AMD CEO Lisa Su said on the earnings call with analysts.
Several Wall Street firms trimmed their price targets on shares amid the disappointing data center results and expectations for a weak first half. Citi downgraded shares to neutral from a buy rating, while JPMorgan its target to $130 from $180. Bank of America’s Vivek Arya said the company has yet to “articulate how it can carve an important niche” relative to Nvidia.
Morgan Stanley highlighted AI expectations as the most significant pressure point, saying that “visibility likely needs to improve for the stock to find its footing.”
CEO of Alphabet and Google Sundar Pichai in Warsaw, Poland on March 29, 2022.
Mateusz Wlodarczyk | Nurphoto | Getty Images
Alphabet shares dropped more than 7% on Wednesday after the search giant fell short of Wall Street’s fourth-quarter revenue expectations and announced big spending plans for its ongoing artificial intelligence buildout.
The stock headed for its worst session in more than a year.
The company topped earnings estimates by 2 cents per share. Revenue came in at $96.47 billion, behind the $96.56 billion expected by LSEG. Alphabet’s revenue grew 12% overall from a year ago, while its YouTube advertising business, search business and services segment slowed year over year.
Alphabet also said it plans to spend $75 billion on capital expenditures as it builds out its AI offerings and races against megacap rivals to build out data centers and new infrastructure. The figure was much higher than the $58.84 billion expected by Wall Street analysts, according to FactSet.
Finance chief Anat Ashkenazi said the higher expenses will help “support the growth of our business across Google Services, Google Cloud and Google DeepMind.” She also said the spending will go toward “technical infrastructure, primarily for servers, followed by data centers and networking.”
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The company expects capital expenditures to range between $16 billion and $18 billion. That was higher than the $14.3 billion estimate from FactSet.
JPMorgan analyst Doug Anmuth highlighted costs, capex and cloud revenue as the “culprits” for the stock’s post-earnings performance. Bernstein’s Mark Shmulik also noted that this is the third quarter that the stock move connects to Google’s cloud segment.
“If digital ad growth is akin to a long drive competition, then Google would be sitting comfortably here with strong Search and YouTube bombs down the fairway,” Shmulik said.
“But as the game shifts to the AI putting green, there’s little room for error with a slight cloud miss, a whopping CAPEX guide up to $75B for 2025, and lack of actionable operating leverage commentary leaves Google 3- putting for bogey,” he added.
Teladoc Health on Wednesday announced it will acquire the preventative care company Catapult Health in an all-cash deal for $65 million.
Catapult offers an at-home wellness exam that allows members to check their blood pressure, collect a blood sample, log other screening information and meet virtually with a nurse practitioner. Teladoc, a virtual care platform, said the acquisition will help it improve its ability to detect health conditions early.
The company said Catapult will operate within its integrated care segment after the deal closes. At JPMorgan’s health-care conferencein January, Teladoc said it is actively working to grow membership and use of services within its integrated care segment.
“Catapult Health’s capabilities will help advance our strategy in meaningful ways — from giving more members access to convenient and impactful wellness and preventative care, to unlocking greater value for our customers,” Teladoc CEO Chuck Divita said in a statement.
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Catapult generated around $30 million in trailing twelve-month revenue as of the third quarter of 2024, Teladoc said. The deal is expected to close in the first quarter of this year.
Teladoc’s acquisition of Catapult comes after a tumultuous period for the company. When Teladoc acquired Livongo in 2020, the companies had a combined enterprise value of $37 billion. The stock has tumbled since then, and Teladoc’s market cap now sits under $2 billion.
In April, Teladoc announced the sudden departure of Jason Gorevic, who joined as CEO in 2009 and steered the company through the Livongo deal and the Covid-19 pandemic. Divita took over as chief executive in June and pledged to position the company for “long-term, sustainable success.”
