Microsoft (NASDAQ:MSFT) continues to cruise higher -- its fiscal first-quarter results came out last week, and profits and revenue again beat expectations. Cloud revenue, and in particular Azure, is growing at astonishing rates for a company of this size. But as Motley Fool Money host Chris Hill and his guests -- analysts Jason Moser, Emily Flippen, and Ron Gross -- note in this segment of the Oct. 25 podcast, Wall Street often isn't satisfied with merely astonishing. There are, in fact, a few points that could be better for the software and services giant. The team breaks down the good, the better, and the "eh" for the company. Then they shift gears to a business that has been in stop-and-go traffic for a while now: Tesla (NASDAQ:TSLA). Its shares got back in the fast lane after it posted a big surprise profit in the third quarter when Wall Street had been forecasting a loss, and the news CEO Elon Musk delivered about its Shanghai factory was even more surprising -- and welcome. The team talks about what's happening, what's ahead, and how they feel about Tesla as an investment.

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This video was recorded on Oct. 25, 2019.

Chris Hill: Shares of Microsoft up a bit this week after first quarter profits and revenue came in higher than expected. Ron, Microsoft's cloud division continues to get it done. The trillion-dollar business just got a little bit bigger.

Ron Gross: Up 37% this year. The company keeps on impressing me. Better than expected results. Revenue up 14%. Intelligent cloud revenue up 27%. But the Azure business in particular up 59%, as you said. Now, to some, that's not good enough because growth is decelerating from the 60s, it was in the 75% range. But for a business this size, 59% is still extremely robust. Nothing for them to hang their heads about. Even their personal computing business was up 4%. Remember that little division of theirs? The Office business with LinkedIn was up 13%. Really strong. Profits all up 24%, as you said, for this approaching $1.1 trillion company.

Emily Flippen: I noticed Ron didn't mention gaming in there at all. What happened to Xbox? I remember for a long time, that was Microsoft's thing, right? It feels like, they have all these other great businesses. Xbox has been really been kind of dragging down as we've seen especially Nintendo Switch come out, all these different ways to play. I think it's interesting. For a long time, it seemed like Microsoft was really innovative with Xbox, and that's just really died. 

Gross: Yeah, I think that's fair. It wasn't working to the extent that they wanted it to work, so they emphasized the more important part of it, which is now cloud. 

Flippen: [laughs] How dare you? 

Hill: I don't think I heard anything you said after you said the word Azure. [pronunciation discussion]

Gross: Azure?

Hill: Azure.

Gross: Alright, come on! We'll cut that out in post-production.

Hill: [laughs] Tesla delivered a profit in the third quarter and shares rose 22% this week. Emily, Tesla also said their new factory in Shanghai is ahead of schedule.

Flippen: That's the first time we've ever heard Tesla say anything's ahead of schedule, so I think that's probably news to investors ears to justify the jump itself. But yeah, the stock shot up more than 20% last time I checked, at least, because they posted a surprise profit, a profit of over $300 million when they were expected to lose over $70 million. That's wonderful for Tesla's shareholders. More importantly, in my opinion, they expect positive quarterly free cash flow from here on out, which is telling because that company has obviously had big issues with cash crunches in the past. Lots of investor excitement, mostly over their new semi-truck, which is supposed to roll out in 2020. I won't get into that again, but it's rumored to be able to hold the weight of 20 T-Rexes. Still hanging on there.

Gross: They're dead, aren't they?

Hill: Wait, we're measuring in T-Rex these days?

Flippen: You have to get up to speed, Chris! It's a lot. I think the most popular truck right now can haul one T-Rex. So, 20 T-Rexes, for context, is a lot of weight. We'll see if Tesla really gets there. But this quarter is definitely a good quarter. There are still lots of bears who are saying it's not sunshine and rainbows for Tesla anymore. Revenues were down quarter over quarter and year over year. Same with operating cash flow. So, it's fair to say that their increase in sales is actually not as profitable for them as they're selling more of their lower-end models, less of the really expensive models. But it'll be fun to see what they do in China. 

Gross: They pull off a good quarter, and it still doesn't resonate with me because Musk has such little credibility in my mind that I always picture --

Flippen: We're going to get some hate there.

Gross: -- some behind the scenes thing going on here, where he's like, "We have to pull back on expenses just for the next month because we've got to show Wall Street a profit." That's not the kind of CEO I would want running my companies that I'm invested in. So, for me, they can sell as many cars as they want, it's past.

Jason Moser: Ron's essentially saying less hyperbole, more Hyperloop, right?

Gross: There you go!