Comprehensive Stock Analysis: Apple, Microsoft, Alphabet, Tesla, Meta, Dynatrace, and Check Point Software
Broker: Maybank Research
Date: 3 February 2025
Apple (AAPL): Outperforming Expectations with Robust Growth
Heading into Apple’s earnings report, concerns circulated about the demand for the iPhone 16. However, Apple defied the skeptics, with supply chain checks indicating that the iPhone 16 cycle is outperforming the iPhone 15. The December quarter saw a record number of iPhone upgraders, boosting the active installed base to 2.35 billion devices, a 7% year-over-year (YoY) increase. This reflects the addition of 150 million new devices in the past year.
Apple’s regions equipped with Apple Intelligence showed better YoY performance compared to those without it, although China experienced an 11% decline in sales due to inventory issues. However, the upcoming April rollout of Apple Intelligence in China and India is expected to drive a rebound in sales. The company also provided robust guidance for March and anticipated service revenue growth, further supporting a positive outlook.
Apple’s extended upgrade cycle from iPhone 16 to 17 and the integration of Apple Intelligence are expected to enhance user engagement over the next 12–18 months. The OUTPERFORM rating on Apple remains intact, with a price target of USD325, encouraging a bullish stance on the stock.
Microsoft (MSFT): AI Revenues Drive Stellar Performance
Microsoft delivered strong results, with Azure revenues growing by 31%, aligning with the lower guidance provided earlier. The company’s AI segment stood out, generating USD13 billion in annual recurring revenue (ARR), surpassing estimates by USD1 billion and reflecting significant enterprise demand.
Although non-AI Azure revenue faced inconsistency due to timing issues, it is expected to recover later in the year. Commercial bookings growth surged 75% YoY, underscoring strong alignment with the AI momentum. Operating margins exceeded expectations, standing at 45.5%. Despite minor weaknesses, the robust AI metrics instill confidence in Microsoft’s long-term growth.
The OUTPERFORM rating on Microsoft is maintained, with a price target of USD550.
Alphabet (GOOG): Cloud Growth and AI Monetization in Focus
Alphabet is set to report its earnings, with healthy demand trends noted in recent surveys and positive feedback from ad agencies. While digital advertising remains robust for Search and YouTube, near-term growth may face FX headwinds and tough comparisons.
The focus is shifting towards Alphabet’s Cloud unit, which is expected to drive upside along with potential cost-cutting measures under the new CFO. The rollout of AI Overviews is poised to enhance monetization opportunities and consumer engagement.
Alphabet trades at a compelling valuation of 22.5x 2025E GAAP EPS, in line with the S&P 500. The company’s capex for 2025 is projected at USD63 billion, with anticipated 4Q revenue of USD96.8 billion, signaling robust growth. The OUTPERFORM rating is reiterated, with a price target of USD220.
Check Point Software (CHKP): Strong Results Positioning for Growth
Check Point Software reported strong Q3 results, with calculated billings reaching USD959 million, surpassing expectations and reflecting robust demand. Total revenue of USD703.7 million exceeded estimates, driven by growth in Quantum Force appliances and Harmony E-mail solutions. The Infinity platform contributed 15% to total revenue and bolstered security subscription revenue.
While the non-GAAP operating margin slightly missed estimates at 43.5%, the EPS of USD2.70 beat the forecast of USD2.25. For FY25, Check Point anticipates total revenue between USD2.66 billion and USD2.76 billion, aligned with market expectations. The company is leveraging AI technologies to enhance its cyber offerings, positioning itself for strong growth.
The price target has been raised to USD240, with the OUTPERFORM rating maintained.
Tesla (TSLA): The Autonomous Vision Takes Center Stage
Tesla’s FY4Q24 results fell short of Wall Street’s expectations, but the company reaffirmed its ambitious plans. Production of a next-generation vehicle platform is set to commence in 1H25, with Cybercab production targeted for 2026. Additionally, unsupervised full self-driving (FSD) is expected to launch as a paid service in Austin, Texas, earlier than anticipated in June 2025.
While Tesla’s delivery growth guidance for 2025 was toned down, CEO Elon Musk highlighted several growth drivers, including a lower-cost vehicle, the FSD rollout, decreasing costs of goods sold, and the expansion of the energy and Optimus production businesses. Despite ongoing debates between bulls and bears, Tesla is projected to achieve a USD2 trillion valuation in the next 12–18 months.
The OUTPERFORM rating is maintained, with a price target of USD550.
Dynatrace (DT): Robust Growth in Subscription Revenue
Dynatrace delivered strong FY3Q25 results, exceeding expectations with better-than-anticipated subscription revenues and growth in its Digital Performance Services (DPS) segment. The company now boasts approximately 1,500 DPS customers, a 400% YoY increase, making up over 35% of its total customer base.
Annual recurring revenue (ARR) reached USD1.65 billion, slightly below analyst estimates, while net revenue retention (NRR) stood at 111%. Total revenues of USD436.2 million surpassed guidance and Street estimates, driven by a 20% increase in subscription revenue. The company remains focused on high-quality customer acquisitions and long-term DPS adoption to sustain growth.
The OUTPERFORM rating is reiterated, with a price target of USD67.
Meta (META): AI Investments Bolster Engagement
Meta delivered strong 4Q results, with revenue of USD48.4 billion, exceeding expectations by 3% and showing a 20.6% YoY growth. Operating income also surpassed consensus, reaching USD23.4 billion. However, guidance for 1Q revenue growth came in slightly below expectations due to a 300bps FX headwind.
Meta’s AI investments continue to drive user engagement, with GenAI tools gaining significant adoption among advertisers. The company reported 3.35 billion Facebook Family Daily Active People and notable increases in ad impressions and pricing. For 2025, Meta plans significant investments, expecting expenses between USD114 billion and USD119 billion. Despite near-term expense growth, the outlook for Meta’s AI initiatives and core business remains positive.
The OUTPERFORM rating is maintained, with an increased price target of USD770.
