Meta and Tesla are funding the future with their core businesses — but only one of them is still growing
The two tech giants, on back-to-back earnings calls, made it sound like they’re selling the same AI-powered future. But the picture of the underlying businesses, and how they’re using AI to furnish current sales, couldn’t be more different.
Tesla and Meta are betting a lot of money on a future that does not yet exist.
Both companies posted better-than-expected earnings Wednesday, but Meta is trading through the roof Thursday while Tesla stock is in the red. That’s illustrative of how the stories they’re telling, though similar, have some important differences.
Tesla expects its capital expenditure to more than double this year to $20 billion. Meta plans to shell out $115 billion to $135 billion — so the midpoint would be about 70% more than what it spent in 2025. Both are using that cash to furnish their AI ambitions, which will supposedly bring new revenue sources.
For Tesla, that’s factories churning out AI robots and self-driving Cybercabs, as well as investment in the AI infrastructure that powers both. (Optimus robots are expected to go on sale next year, while Cybercabs are slated for production in the first half of this year — but Tesla consistently misses its own deadlines.)
For Meta, its AI spending is going toward future revenue sources that are even squishier. Talking about the promise of upcoming AI models on the earnings call yesterday, CEO Mark Zuckerberg was admittedly vague: “We’ll be able to have different products paired with those [models] that I think will facilitate different businesses for — businesses who use us and our platforms, as well as direct consumer businesses.”
Notably, both Meta and Tesla still get the vast majority of their revenue from their core business lines. Last quarter, 97% of Meta’s revenue came from ads, while 71% of Tesla’s revenue came from regular electric vehicles.
(Interestingly, Tesla announced that it was discontinuing two of its four main EV models, though data from Cox Automotive shows they represented only a tiny fraction of Tesla’s EV sales anyway. Still, the stock pulled back yesterday on that announcement.)
Both companies say they’re using their AI investments to boost their current businesses, but so far it’s only really working for Meta. Meta’s revenue grew 24% last quarter, as its AI investments helped grow ad sales. Tesla’s revenue fell 3% last quarter as softer vehicle sales outweighed gains in higher-margin services like Full Self-Driving subscriptions. Meta’s ad revenue also grew 24%, while Tesla’s automotive revenue fell 11%.
Tesla believes that someday its AI investments will enable truly driverless cars, which in turn will drive both vehicle sales and FSD subscriptions, but for now those capabilities are unproven.
During the earnings call, Bank of America analyst Justin Post asked Zuckerberg, “Can you do things beyond ads?”
Zuckerberg replied yes but didn’t have much to share.
“For the next couple of years, ads are going to be by far the most important driver of growth in our business,” he said.
For now, that’s good enough because its core business, unlike Tesla’s, is still growing.
