This week marks a pivotal moment for Big Tech as Apple, Amazon, Meta, and Microsoft release their earnings reports. Collectively, these companies represent over $9 trillion in market capitalization, significantly influencing the broader market. They account for approximately 19% of the S&P 500, over 30% of the Nasdaq 100, and nearly 12% of the Dow Jones Industrial Average (excluding Meta). Their performance will shape not just the tech sector but the entire market.
Recent challenges such as rising tariffs, declining hardware sales, waning consumer confidence, and uncertainties surrounding AI investments have heightened the stakes for this earnings cycle. Here’s what to watch:
Microsoft’s report on Wednesday will focus on cloud margins and AI monetization. Analysts anticipate earnings per share of about $3.22 on revenue of $68.4 billion, reflecting year-over-year increases of 8.8% and 10.6%, respectively. Azure cloud growth is expected to be around 30%, down from 40% last quarter. Investors are keen to see if Microsoft’s AI tools, particularly Copilot, are driving enterprise spending.
Meta Platforms, parent company of Facebook and Instagram, reports on Wednesday as well. Analysts predict EPS of $5.22 on revenue of $41.35 billion, marking year-over-year increases of 11% and 13%. Advertising remains Meta’s primary revenue driver at 96%. Despite regulatory challenges, Meta launched an AI assistant app powered by its Llama 4 model, signaling its commitment to integrating AI across platforms.
Amazon’s earnings on Thursday will highlight AWS and margins amidst political tensions. Wall Street expects EPS of $1.35, up 38% year-over-year, on $142.5 billion in revenue. Operating margins, especially in North America, are crucial. AWS continues to drive profitability despite moderating growth rates. Trump’s tariffs on imported goods could impact margins.
Apple’s report on Thursday will scrutinize iCloud revenue amid softer iPhone sales. Analysts expect Q1 EPS of $1.62 on revenue of $90 billion. Services revenue, including iCloud and Apple Music, is expected to grow double-digits but may not offset declining hardware sales. AI developments and tariff uncertainties remain key concerns.
— new from qz.com