?? Tesla gets green light for driving system in China, McDonald's faces rare EPS miss, Starbucks faces heat as it lowers guidance and more.

Hello, dear readers! ??We hope you had a great week.? Here's your weekly update on the latest news from finance and markets.

Microsoft saw a notable increase in its stock value after releasing an impressive Q3 report. The software giant achieved its fifth consecutive EPS beat along with higher-than-expected revenue. Tesla's stock rose on Monday following CEO Elon Musk's unexpected trip to Beijing, where he reportedly secured tentative approval for the company's driving software. After its Q1 results, McDonald's (MCD) saw a slight drop in trading. The company missed adjusted EPS for the first time in eight quarters, surprising investors. Starbucks faced a drop in revenue and global store sales in Q2, down 1.8% and 4% year-over-year respectively, missing analyst expectations. During the closing arguments of the government's antitrust lawsuit against Google, U.S. District Judge Amit Mehta posed probing questions to both the Justice Department and Google.

Stay tuned for more updates in the dynamic world of finance and markets! ??

Microsoft surges following strong Q3 report: Azure growth beats expectations

Microsoft saw a notable increase in its stock value after releasing an impressive Q3 report. The software giant achieved its fifth consecutive EPS beat along with higher-than-expected revenue. While Q4 revenue guidance was generally in line with expectations, Azure's growth of 31% surpassed prior guidance of 28%. This growth was particularly encouraging as Azure had previously hovered in the high-20s in recent quarters. Additionally, Q4 guidance remained strong at 30-31%. Microsoft highlighted an uptick in large Azure deals, with an increase in multi-year commitments exceeding $1 billion and a significant rise in deals over $100 million and $10 million. AI adoption has been a key driver of this growth, with customers utilizing Microsoft's Azure platforms and tools to develop their AI systems. The company emphasizes its diverse selection of AI accelerators, including offerings from NVIDIA, AMD, and its own first-party silicon. Looking ahead, attention will be on cap-ex spending and its impact on margins. Microsoft anticipates a substantial increase in cap-ex spending in Q4 and FY25 to support cloud and AI infrastructure investments as it scales up to meet growing demand.

Tesla gets green light for driving system in China

Tesla's stock rose on Monday following CEO Elon Musk's unexpected trip to Beijing, where he reportedly secured tentative approval for the company's driving software. Musk met with a senior Chinese government official on Sunday, coinciding with the Beijing auto show where local carmakers showcase their latest electric vehicle models. According to The Wall Street Journal, Chinese officials informed Tesla of the tentative approval for its "Full Self-Driving" (FSD) software, despite the need for human supervision. Meanwhile, the U.S. auto safety agency is investigating Tesla's Autopilot system's effectiveness in ensuring driver attention after last year's recall. Tesla reported 20 more Autopilot-related crashes post-recall. Despite these concerns, Tesla's stock surged nearly 15% in afternoon trading, marking its largest one-day increase since February 2020. However, year-to-date, shares are still down by 22%. Tesla has been grappling with declining stock prices and production slowdowns. Despite a significant drop in Q1 net income, the company remains optimistic about future growth, highlighting a new, more affordable car and plans for a fully autonomous robotaxi.

McDonald's faces rare EPS miss: 2024 signals unusual year ahead

After its Q1 results, McDonald's (MCD) saw a slight drop in trading. The company missed adjusted EPS for the first time in eight quarters, surprising investors. Although revenue matched expectations, comparable sales were lower. Despite concerns voiced during the call, the stock held steady, possibly due to recent declines. Global comparable sales grew by 1.9%, with US sales at 2.5%, down from Q4 levels. US growth was driven by menu price increases, effective marketing, and digital efforts. However, International Operated Markets (IOM) saw stronger results, while International Developmental Licensed (IDL) remained weak. McDonald's highlighted ongoing consumer pressures, particularly among lower-income groups, impacting industry traffic. While not offering specific guidance, the company anticipates sales moderation in 2024 due to macroeconomic challenges, which have been more significant than expected. Despite challenges, McDonald's aims to accelerate new restaurant openings, targeting 50,000 globally by 2027. Progress is evident, especially in China, where the company recently reached a milestone with its 6,000th restaurant opening. Additionally, McDonald's remains committed to long-term growth through digital and technological investments.

Starbucks faces heat as it lowers guidance amid customer spending cuts

Starbucks faced a drop in revenue and global store sales in Q2, down 1.8% and 4% year-over-year respectively, missing analyst expectations. Following a lackluster Q1 report, the company's shares took another hit as it fell short in Q2 and revised down its FY24 guidance. The root cause of the slump lies in a more price-conscious consumer base. Despite efforts to boost sales through promotions and new menu items like Lavender Lattes, foot traffic declined, particularly among occasional customers. This trend was seen across all markets, with North America, the U.S., and China experiencing notable drops. Starbucks now expects low growth for FY24, with flat to low declines in comparable sales. EPS projections have also been adjusted downward. However, the company remains optimistic, focusing on improving digital order fulfillment and introducing new products to attract customers.

Judge raises questions in Google vs DOJ trial conclusion

During the closing arguments of the government's antitrust lawsuit against Google, U.S. District Judge Amit Mehta posed probing questions to both the Justice Department and Google. The Department of Justice (DOJ) emphasized Google's alleged monopoly and accused it of using its power to benefit itself unlawfully. Judge Mehta pointed out that Microsoft admitted it had not invested enough in mobile search, suggesting that Google's success in this area wasn't inherently anticompetitive. However, the government argued that one mistake by a rival doesn't justify Google's ongoing dominance. Google's lawyer, John Schmidtlein, rejected allegations of anticompetitive behavior. This case, initiated during the Trump administration, is the first of five aimed at curbing the market power of major tech companies.

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