Chapter 1: What is the main topic discussed in this episode?
News when you want it with Bloomberg News Now, I'm Doug Krisner. And we begin with earnings news. After the bell, Tesla reported first quarter profit above estimates. These results may be an encouraging sign since Tesla reported sluggish vehicle sales in Q1. But later on a call with analysts, Tesla said it sees CapEx spending this year above $25 billion.
Now, the previous guidance was a little over $20 billion.
Chapter 2: What are the latest earnings results for Tesla?
Here is Bloomberg's Dana Holt.
Tesla is going to spend big this year on AI Compute, on the Terafab, on their Terafab factory. They also announced that they're going to have to fix a lot of cars. Cars that have the hardware 3 are not really capable of FSD unsupervised. So there's going to be a lot of spending. And that figure, I think, has investors a little worried about.
That was Bloomberg's Dana Hull. Shares in Tesla were down 2% in late U.S. trading.
Chapter 3: How is Tesla planning to allocate its $25 billion spending?
IBM posted quarterly sales in its software unit that were in line with estimates. Software revenue increased 11% to a little more than $7 billion. Still, there are concerns about AI disrupting IBM's business. Shares in IBM were down 6% in late U.S. trading. And Texas Instruments gave a strong forecast for the current quarter, helped in part by booming spending on AI data centers.
Shares in Texas Instruments are up 10% in late U.S. trading. Yesterday, President Trump extended a ceasefire in the Iran war that was due to expire today. And today, there were confusing signals from the president. Trump told Fox News the ceasefire extension was for three to five days. But later, the White House refuted those claims.
Chapter 4: What impact does AI have on Tesla's future plans?
Here is Press Secretary Caroline Leavitt.
I'm not going to set a timetable for the president. He has not done that and I won't. I know there's been some anonymous sourced reporting that there was maybe a three to five day deadline. That is not true. The president has not set a deadline himself. Ultimately, he will dictate the timetable.
Now we know the U.S. and Iran are locked in a battle for control over the Strait of Hormuz. Earlier today, Iran attacked three ships near the critical waterway. Gunboats fired on commercial vessels with a cargo ship and a container vessel coming under fire. And at the same time, the U.S. is maintaining its naval blockade on ships going into and out of Iranian ports.
Now, Iran's foreign minister, Abbas Arachi, called the move a violation of the ceasefire. And Iranian President Massoud Perzeskin said the blockade and threats are main obstacles to diplomacy. We got reaction from Wayne Sanders. He is senior defense research analyst at Bloomberg Intelligence.
Right now, both the United States as well as Iran are looking at how can I operate militarily in order to still gain leverage in the region during this type of negotiation, right? And so they've pretty much just restricted it down to the Straits of Hormuz.
That is retired Colonel Wayne Sanders speaking on the Bloomberg Balance of Power podcast. Meantime, the Pentagon says it will take six months to fully clear the Strait of Hormuz of Iranian mines. The Washington Post reports the Defense Department informed Congress that any such operation is unlikely to be carried out until after the war is over. U.S.
Navy Secretary John Phelan is stepping down effective immediately. The Defense Department gave no reason for this decision. However, the Wall Street Journal reports Phelan's departure comes after months of simmering tension with Defense Secretary Pete Hegseth. Now, the U.S. Navy is currently helping to oversee the blockade of the Strait of Hormuz, one of its biggest operations in decades.
A judge in Virginia has issued an order halting the implementation of a plan to redraw the state's congressional maps. It was on Tuesday voters in the states backed a Democratic plan to redraw the state's congressional districts. Now, the referendum would net Democrats extra seats in the House of Representatives in 2026.
However, the Republican National Committee filed suit against the Virginia Department of Elections, and a judge in rural southern Virginia has ordered the results not be certified. Well, Virginia's Attorney General Jay Jones says his office will immediately appeal this ruling. Ultimately, it appears as though Virginia's state Supreme Court will decide.
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