The Q1 2026 earnings reports of the four major U.S. tech giants—Google, Microsoft, Amazon, and Meta—were released simultaneously. How should we interpret them?

We are still far from a bubble bursting, and it’s not yet time for these giants to engage in head-to-head competition for market share—so I remain confident about U.S. equities this year, even with the current U.S. president being, well, a ‘brilliant’ character. Several industry professionals have already provided excellent detailed analyses; here, I’ll just offer a lighthearted take. First, U.S. corporate spending on AI infrastructure continues to rise. According to independent investment banking advisory firm Evercore and Bank of America, AI infrastructure investments by tech giants in 2026 are expected to exceed prior forecasts—reaching roughly $800–900 billion. In 2027, that figure will surpass $1 trillion. Although clear monetization pathways for AI remain hazy, for these giants, the AI era isn’t a lavish banquet—it’s a ravenous grizzly bear. Their logic behind AI investment isn’t ‘run faster to get more,’ but rather ‘run slower and you’ll be devoured.’ In other words: if AI truly delivers massive commercial value, falling short on compute investment means missing out entirely—and that would be disastrous. Second, hardware endpoints have multiple fallback options; software endpoints must fight tooth and nail.

Full English translation of Tesla’s Q1 2026 earnings call transcript

Automotive gross margin, excluding regulatory credits, improved sequentially from 17.9% to 19.2%. Please note that this includes a one-time benefit of approximately $230 million from the reversal of warranty accruals, as well as certain tariff-related relief. As the final outcome remains highly uncertain, we have not yet realized any benefit from the Supreme Court’s ruling on IEEPA-related tariffs. Both tariffs and persistently high interest rates continue to increase our automotive costs. Interest subsidy costs are recognized upfront. If interest rates continue rising, these subsidy costs will further pressure automotive gross margin. Regarding FSD adoption, we continue to see improvement, with global paying customers approaching 1.3 million. Most of this growth came from subscriptions, while one-time pre-purchases grew only 7%, as we removed the purchase option in certain markets during Q1. We recently received FSD approval in the Netherlands—laying a solid foundation for EU-wide approval later this quarter, pending only regulatory review timelines. We have also secured approval in China. Broader approvals have not yet been granted, but we are actively collaborating with Chinese regulators and hope to obtain approval in Q3. With these approvals, we expect broader software adoption across our existing fleet—and incremental demand for our vehicles. Taking all this into account, we have adjusted our vehicle sales strategy: we now position FSD as the core product, while the vehicle itself serves merely as the delivery mechanism. As previously noted, our energy storage business is inherently volatile—tied closely to customer deployment schedules. In Q1, we deployed 6–8.8 GWh of energy storage, down 38% sequentially. Nevertheless, we still anticipate 2026 deployments will exceed those of 2025. Thanks to one-time tariff-related benefits—stemming from tariffs paid in prior quarters totaling over $250 million—the business achieved a record gross margin exceeding 39.5%. On a normalized basis, however, intensifying competition and ongoing tariff impacts are expected to compress energy business margins. As previously highlighted, tariffs may exert an outsized impact on this business, given that most battery cells are sourced from China. Order backlog remains strong, and we are scaling capacity aggressively—not only to meet existing demand but also to accommodate unexpected surges. Service and other gross margin rose sequentially from 8.8% to 9.2%. This segment encompasses a broad range of customer-support initiatives—including service centers, certified pre-owned vehicles, paid Supercharging, parts sales, insurance, and even our Robotaxi business. We’re making prudent infrastructure investments to support Robotaxi operations in the future. Our Robotaxi fleet grew sequentially, and we expect continued ramp-up as we accelerate deployment and expand into additional regions. On operating expenses: expenses increased sequentially, primarily due to stock-based compensation charges tied to the full-quarter recognition of the 2025 CEO compensation plan—one milestone under which remains deemed achievable. Additionally, spending on AI-related initiatives—including development of our proprietary AI5 chip, as well as new products like Cybercab, Semi, Optimus, and Megablock—remains elevated, and we expect this trend to continue throughout 2026.

REX American Resources Reports Q1 2026 Revenue of $156.5M, EPS $0.56

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