Happy Thursday!

Jim Cramer weighs in on Tesla (TSLA) - Get Report earnings, Microsoft (MSFT) - Get Report earnings and why investors should pay attention to China this earnings season.

Tesla's Earnings

The electric carmaker posted an unexpected profit of $1.86 per share on net income of $342 million, compared to Wall Street's consensus forecast of a 42 cent loss. In after-hours trading, shares of Tesla were up 20% as investors digested the results.

Despite missing expectations on revenue -- sales came in at $6.303 billion, lower than estimates of $6.425 billion -- investors were heartened by the adjusted income and considerable margin improvements that Tesla reported, reported TheStreet's tech reporter, Annie Gaus. 

Tesla CFO Zach Kirkhorn pinned the margin improvements on a combination of higher average selling prices for Models S and X, more targeted pricing adjustments, and "just a tremendous amount of good work" in promoting capital efficiency across Tesla's manufacturing, labor, warehousing, and logistics.

Is it time to give Tesla another look? Here's what Jim Cramer has to say: 

Real Money Stock of the Day Microsoft

The Redmond, Washington-based company reported a 14% increase in fiscal first-quarter revenue to $33.1 billion on earnings that increased by 21% to $1.38 per share. Analysts were expecting the company to report revenue of $32.2 billion on earnings of $1.24 per share.

The company said that its cloud operations led to an increase in revenue and profits as the company's Azure cloud service segment reported a 59% increase in revenue.

"The world's leading companies are choosing our cloud to build their digital capability," said CEO Satya Nadella. "We are accelerating our innovation across the entire tech stack to deliver new value for customers and investing in large and growing markets with expansive opportunity."

What's Going on With China?

Cramer weighed in on China in his 

"Here's a wild one. We all know that our relations with China are in rapid deterioration. Why not? Our president wants it that way. I believe our understated goal is to have the Chinese make an agreement, one they can't live up to, but one that gives our companies more chances to get out of China. As China, once again, buys nothing, you suspect that President Trump will accelerate tariffs in order to look like he hasn't been had. This was the way of the Argentinian talks, it's the way of the Washington talks. The soft-liners make their gains think Secretary Mnuchin and Chief Economic Advisor Larry Kudlow, then the Chinese disappoint and then the hardest liner, Peter Navarro, tells the president "I told you so." The president actually doesn't mind the face-off. It's kind of like The Apprentice, with the Mnuchin-Kudlow team going down the elevator while the Navarro team wins and all during the contest, the president can prove the intransigence of the talks, the futility of the talks, causing the ratings to surge and the votes to pile up all the while forcing the hands of the Hasbros (HAS) - Get Report and the Restoration Hardwares (RH) - Get Report to source away from China," wrote Cramer. 

And let's talk about the one question that Cramer brought up that is on every investors mind right now: Who is winning in China, who is proving indispensable?

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