Week of 2 Feb Summary: Earnings Reports, Market Shifts & Gold Surge
Thursday 06 February 2025
Meta Cuts Jobs & Tesla Rebound Fades in Tech Sell-Off
Tesla (TSLA) stock briefly bucked the trend of weakness in tech stocks, rising on Tuesday morning, 14 January, but eventually closing the day lower alongside Meta (META), which dipped amid news of company layoffs.
The pullback in tech stocks in 2025 has continued, with the tech-heavy Nasdaq index's 5th consecutive daily lower close as of 14 January.
Meta announced the job cuts on Tuesday, 14 January, which will consist of a 5% reduction in its workforce. On the other hand, Tesla shares temporarily benefited from a research report noting record global EV sales for a fourth month as well as Morgan Stanley analysts raising their price target on the stock.
Tesla vs Meta Stock Performance Chart
Both TSLA and META stocks are undergoing a pullback from record highs that began in early December. The higher percentage decline in Tesla vs Meta stock comes after a greater run-up in Tesla shares in 2024.
Tesla stock is up +81.08% over the past year ending 14 January, while Meta has risen +58.68%.
Meta Job Cuts
According to an internal memo released by Bloomberg, Meta will let go of 5% of its workforce, informing the employees as of 10 February. CEO Mark Zuckerberg announced plans to "move out low performers faster" on the company’s internal forum, calling 2025 an "intense year."
A company director clarified that about 5% of Meta’s 72,000 employees, its lowest performers, will be cut. This marks Meta’s largest layoffs since cutting 21,000 jobs- or about a third of its workforce - in 2022/2023.
Some shareholders see job cuts as a positive development, as they see the immediate benefits of lower costs to the company's bottom line. However, investors are also grappling with a broader decline in technology stocks after a bumper year in 2024, especially for the so-called Mag 7 stocks. (Source: Investor's Business Daily)
Tesla and Global EV Demand
Tesla shares jumped nearly 5% Tuesday morning, boosted by strong EV sales data and a bullish analyst call from Morgan Stanley, but they ended the day down 1.72%.
Morgan Stanley (MS) raised its Tesla price target from $400 to $430, with a bullish scenario of $800 based on robotaxi potential. Meanwhile, EV research firm Rho Motion reported December's fourth consecutive monthly record for global EV sales, with over 1.9 million units sold—a 5% increase from the prior record.
While a robust EV market, coupled with a potentially more supportive US administration under Musk’s friend, President-elect Donald Trump, could be tailwinds for Tesla stock, the shares could still come under pressure if the tech sector as a whole continues to lag.
Conclusion: What’s the Outlook for Tesla & Meta Stocks?
Meta's latest job cuts reflect ongoing cost-saving measures, but investor sentiment remains cautious amid a broader tech sell-off. Meanwhile, Tesla’s strong EV sales and bullish analyst calls haven’t shielded the stock from broader market weakness. Both companies face headwinds as the tech sector pulls back from 2024 highs, with further volatility likely in the near term.
