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In today’s edition,
- YouTube’s revenue growth
- China’s gaming industry
- Tesla’s sales decline
- Morgan Stanley and Crypto
Market Snapshot
Stock market closing data for the week of Dec 30th, 2024 to Jan 3rd, 2025
News Summaries
Under Neal Mohan, YouTube now brings in $50 billion a year in revenue for Alphabet. Its advertising revenue rose by 15% to $25.7 billion in the first nine months of 2024. YouTube spent over $20 billion on original content, ranking third after Disney and Comcast. It has paid creators $70 billion over three years and secured a $14 billion deal with the NFL. This deal led to 35 billion hours of sports content streamed last year. To foster growth, YouTube is rolling out AI tools like Dream Screen and auto dubbing. These aim to improve experiences for both users and creators. This effort comes as Alphabet faces legal challenges and AI competition, making YouTube crucial for revenue and innovation.
China’s video game industry is set to launch more hit titles in 2025. This follows the success of Game Science’s Black Myth: Wukong. The game sold 10 million copies in three days, earning $1.1 billion, with 70% of sales in China. This success has sparked more investment. In 2024, nearly 1,300 new game licenses were approved. Tencent’s gaming revenue also rose by 6%, reaching ¥106 billion ($14.6 billion) in nine months. Despite challenges, such as NetEase’s 4% revenue drop, the industry is moving towards bigger projects. These projects benefit from lower costs and renewed government approvals. The game’s cultural depth and media backing are inspiring developers. They aim to create more competitive titles for the global market. Chinese studios, with their cost advantages and skilled workers, are ready to compete internationally. Upcoming games like Phantom Blade Zero and Wuchang: Fallen Feathers are expected to build on Black Myth’s success. This positions China as a key player in the global gaming scene.
In 2024, Tesla delivered 1.79 million vehicles, a drop from 2023’s 1.81 million. This was its first decline since 2011. The company delivered 495,570 vehicles in the last quarter, up 2.3% from the previous year. However, this fell short of the 500,000 target. Despite this, Tesla remains the top EV maker globally. Yet, it faces tough competition from BYD, a Chinese company. BYD sold 1.76 million pure EVs and 4.3 million EVs and hybrids in 2024. Following Tesla’s report, shares fell over 6%. Investors are now skeptical about CEO Elon Musk’s 2025 sales growth forecast of 20-30%. Tesla also faces political challenges due to Musk’s ties with President-elect Trump and California’s tax policies. The company is shifting focus towards autonomous driving, AI, and robotics. It aims to launch a self-driving Cybercab by 2027.
From the World of Crypto
Morgan Stanley is planning to add cryptocurrency trading to its E-Trade online brokerage platform.
This move is based on the expected easing of regulations under President-elect Trump. He aims to appoint friendly leaders and make the US a crypto hub.
If it goes ahead, E-Trade will rival Coinbase, becoming a major player in crypto trading. Since buying E-Trade in 2020, Morgan Stanley has built up 5.2 million accounts and $360 billion in assets. This could bring crypto trading to many new investors.
Other brokerages like Robinhood, Fidelity, and Interactive Brokers already offer crypto trading. Charles Schwab plans to join them this year.
These platforms typically offer fewer tokens than exchanges like Coinbase.
Crypto trading is profitable. Robinhood’s Q3 2024 showed a 112% jump in trading volume and a 165% rise in revenue, hitting $14.4 billion and $61 million.
In June, Robinhood bought the Bitstamp exchange for $200 million to better serve institutional investors. Coinbase reported $1.2 billion in Q3 2024 revenue, mainly from crypto trading.
Morgan Stanley has been proactive in the crypto sector. In August, it allowed its advisers to recommend Bitcoin ETFs. The firm’s advisers manage about $3.75 trillion, including $1 trillion in self-directed accounts. They are promoting BlackRock’s and Fidelity’s leading Bitcoin ETFs.
This move signals a growing acceptance of cryptocurrency in mainstream finance, driven by demand and potential regulatory shifts. As more brokerages adopt crypto, competition will increase, offering investors more choices and likely boosting the market.
