Breaking Down Tech’s Wild Earnings Season so Far

It’s been a wild earnings season so far for the largest tech and tech-related stocks. On the Feb. 2, 2026, episode of The Morning Filter podcast, David Sekera and Susan Dziubinski discuss the market’s response to the recent earnings reports from Microsoft MSFT, Meta META, Tesla TSLA, Apple AAPL, and ServiceNow NOW and talk about which of the group are the most attractive stocks to buy after earnings.

Susan Dziubinski: Tech and tech-related companies had a wild earnings week last week, to say the least.

David Sekera: To say the least, that’s for sure.

Dziubinski: Morningstar maintained its $600 fair value estimate on Microsoft stock after earnings. What did you think of the results?

Sekera: So, overall results came in above guidance. Revenue was up 15%. I believe revenue was $81.3 billion. Guidance was only $80.6 billion. Operating margin, 47.1%. Guidance was 45.8%. So, very well as compared to what they told the market they were going to do. Now, of course, everybody was watching what’s going on with Azure. That’s their cloud-hosting business. That’s really an indication of how well they’re able to grow that in order to be able to meet the demand out there for artificial intelligence hosting. That was up 38%. That compares to their guidance of 37%. And they still noted that they’re capacity-constrained there. So, still a lot more growth yet to come. Elsewhere, results were generally strong across the board. When you look at their guidance, we thought it was really in line, maybe even slightly better than what we have in our model. I mean, not enough really to make us change our fair value all that much. And just generally, there was really nothing in the results or the conference call that caused our analyst to reevaluate his thoughts on the long-term investment thesis of this company.

Dziubinski: Results did seem pretty good, yet Microsoft’s stock was down about 10% after earnings. What do you think drove that selloff?

Sekera: To be perfectly honest, I don’t really know. I mean, there were definitely a lot of media headlines out there. There were definitely stories out there talking about the Azure growth at 38% missed the whisper number. That was supposedly 39%. In my opinion, I don’t think that’s why the stock would have been down that much if you came in at 38% versus 39%. Other stories out there are talking about how the market is concerned that maybe now they’re spending too much money on artificial intelligence capex. That they’re not going to be able to make enough return to be able to justify that spending. I don’t know. That doesn’t really seem to be the right reason to me as well. If you look at Meta, that stock went up because they were spending more money on AI.

I think more likely than not, maybe it’s just a matter that the market is really now starting to lump Microsoft in more with the traditional software businesses than looking at is maybe more of an AI beneficiary. If you look at software stocks, they’ve been sliding really since late 2024, early 2025. A lot of those stocks have fallen over the course of 2025 to a pretty large degree. Generally, when you look at software, the market is concerned. How is AI going to disrupt these business models over the next couple of years? In our view, generally, we think AI probably improves the economic value of software as opposed to replacing software. So, really hard to know exactly what it was. It might even just be the technicals, might just be the downward momentum. It’ll be interesting to see where that stock trades this week.

Dziubinski: Given that we were pretty pleased with the report. We didn’t change the fair value given that the stock pulled back. Do you think Microsoft stock is a buy?

Sekera: We think so still. A 4-star-rated stock at a 28% discount to fair value. So again, this might be one of those good instances where the market’s giving you the opportunity for something that might be a core holding in your portfolio. To be able to dollar-cost-average down and be able to break up a little bit more here and bring your average cost basis lower.

Dziubinski: You mentioned Meta, so let’s talk about Meta’s results, which the market cheered. Stock was up double digits, and Morningstar maintained its $850 fair value estimate on Meta stock. What got the market so excited? All that spending?

Sekera: Well, yeah, I mean, but not just the spending, just the amount of revenue growth that they were able to post. A fourth-quarter revenue up 24%, then they gave first-quarter guidance for revenue to be up 30%. And really, it’s just being driven by higher increases for ad sales. We’re looking for 2026 revenue growth for the full year of 25%. So, for the full year, maybe a slower rate than what we’re seeing here in the first quarter. But I think really, what it gets down to, the way the market is interpreting these growth patterns here in the short term, is that artificial intelligence, and how they’re using it, is already boosting their demand growth for those ads. Secondly, as you mentioned, capex guidance was $115 billion to $135 billion for 2026, much higher than what we or the market was looking for. So, really, what the market is saying is that additional capex is going to bolster the intrinsic value of the company by being able to increase the demand for ads over time. Now, just to put that in perspective, $125 billion is the midpoint of that guidance. There’s less than 100 companies in the United States whose market cap is greater than $125 billion. So, just putting that into perspective, that’s a huge, huge number when you think about how much they’re going to spend on AI this year. I mean, the fact that there’s only a handful of companies with that much market cap or larger, I think, should make people kind of take a step back and really reevaluate the long-term economic value for AI overall, and who’s going to be the big beneficiaries.

Dziubinski: Even after the runup in Meta’s stock price, Meta still looks undervalued, according to Morningstar today. Do you think it’s a buy?

Sekera: At this point, it trades at a 16% discount to our fair value, just enough to put it in 4-star territory. But based on our Uncertainty Rating, it really puts it right at that border with 3 stars. So, not a lot of margin of safety, with as much as it’s risen off the lows at this point. In my opinion, I think, when I look at Meta, it’s really just a levered bet on its ability to use AI to be able to generate these kinds of growth rates over the longer term. As we’ve talked about for this year, for 2026, I think most investors, you really want to keep that portfolio balanced between still having that upside exposure to artificial intelligence. I think some of these AI stocks still have further to run. Having said that, I expect it’s going to be a very volatile year. We can see a lot of price movement in those AI stocks. I think you want to offset that with a balance of value stocks. That way, when we do get those market selloffs, value stocks should hold their pricing to the downside. You can always unwind some of that to be able to then dollar-cost-average into the AI stocks. Conversely, when the AI stocks rally too far, too fast, then you can do some profit-taking there and then put that money back into value.

Dziubinski: Morningstar increased its fair value estimate on Tesla to $400 per share after earnings. It’s a pretty big increase. Given all the news that we got out of Tesla TSLA last week, what do you think drove the bulk of that fair value increase?

Sekera: There are a lot of different factors, but in my mind, it comes down to really two: robotaxis and robots. Our analysts noted that the expansion of robotaxis is going into seven more cities in the first half of this year. They’re also removing employees from robotaxis in Austin. So, in our mind, that shows a lot more confidence in the software. And we think that’s now going to drive even greater adoption of the full self-driving subscriptions, as people get more and more comfortable with full self-driving and robotaxis. As far as the humanoid robots go, it’s kind of amazing that the company said they’re going to stop producing the Model S and X electric vehicles, and they’re going to retool those factories to start making Optimus robots. When you look at our fair value increase, it really all just came down to increasing our free cash flow forecasts, so an increase in that full self-driving software subscriptions, but then also pulling forward the projections we had in our model for the Optimus robots. And so bringing forward those free cash flows that we projected further out in the future also was a large part of our increase in fair value.

Dziubinski: Tesla stock pulled back after earnings, but then bounced back on media reports that SpaceX and Tesla might merge. Between Morningstar’s fair value increase and then last week’s stock movement, is there an opportunity to buy Tesla stock right now, do you think?

Sekera: I think this is also just an indication of why we rate the stock with a Very High Uncertainty Rating. I think if you’re involved in this one, it is largely a bet on Elon Musk. I think you have to be very prepared for a very wide dispersion of how this stock is going to trade over time. Based on our new, increased fair value, it is a 3-star-rated stock. Overall, I’d say we prefer to see a greater margin of safety before you look to buy.

Dziubinski: All right. Maybe they’ll change the ticker on this if they merge, Dave, to something like ELON or MUSK. We’ll see.

Anyway, Apple AAPL put up what most would consider to be terrific results on better-than-expected iPhone growth, and Morningstar raised its fair value estimate on Apple stock by $20 to $260. But the market didn’t seem too impressed. Why the disconnect? And do you think Apple’s an attractive stock to buy today?

Sekera: That fair value increase is just a combination of incorporating a little bit stronger short-term iPhone growth and what we were looking for, and then a small increase in profitability. Some of that we’ve been watching for a while. You get that mix shift into services, which have higher margins. But in this case, I think it’s just much more proof that the vertical integration and supply chain management are doing better and helping improve some of the margins on those handsets. Now, I would note that a lot of this was offset by the marketplace. I think there are some concerns that a large amount of their growth came from China, especially when you compare that to kind of historically what they’ve sold into China. People are concerned about whether that growth to China specifically is sustainable or not. And then there are also a lot of concerns about the cost for memory. Memory prices have just been skyrocketing for the past four to six months or so. As those roll through, that may offset some of the efficiency gains that they’ve been getting elsewhere in their supply chain.

Overall, I think there’s a lot of just general concern also regarding their AI strategy. Still trying to really understand what tangible AI features they are going to offer. Will those products really add a lot of economic value to consumers? And then, will consumers pay higher prices for their devices for that AI product? That is still to be seen. As you mentioned, the stock is trading right at our $260 fair value, putting it right in the middle of the 3-star territory. So, not necessarily a new buy today. If you already own the stock, I would just expect for a long-term investor that you probably earn over the long term, over that three- to five-year hold period, the cost of equity type return for this stock.

Dziubinski: All right. ServiceNow’s NOW stock tumbled about 10% after earnings. Morningstar brought down its fair value estimate on this one to $200 per share. Unpack ServiceNow’s results, that fair value change, and let us know whether the stock is attractive today.

Sekera: Markets just hate software stocks. They’ve hated software stocks all of 2025. And to some degree, it really doesn’t matter what the results are that companies have been posting. In this case, their revenue is up 19.5% year over year. Operating margin, 30.9%. Both of those came in above the high end of guidance. This might be, as far as I remember, the fifth consecutive quarterly beat. So again, they just keep raising and beating, but the market just doesn’t care. We made a couple of tweaks to our model. I think we have slightly slower medium-term growth and margins. We had about a 5% cut to our fair value to $200 per share. Really not that meaningful of a cut when you look at where the stock is trading. Overall, no major change to our long-term investment thesis. It’s just a matter of having a differentiated view of how AI may or may not impact these types of software companies over time. In our view, we think that AI really just helps enhance these products over the long term, as opposed to displacing these products.