Big Tech Earnings Season Kicks Off with Focus on AI, Economy, and Trump Factor
AI in the Spotlight
As the tech industry's earnings season begins, AI is expected to dominate discussions. Companies will unveil plans for monetizing AI technology and investments in data centers and AI model development.
Trump's Impact
President Trump's policies, including tariffs, export controls, and antitrust regulations, will closely scrutinize Big Tech's performance. Companies are assessing their relationships with the administration to avoid potential disruptions.
CHIPS Act Uncertainty
The fate of the CHIPS Act, aimed at revitalizing domestic semiconductor manufacturing, is uncertain. Trump has expressed criticism of the legislation, potentially impacting Intel and other chipmakers.
AI Revenue and Spending
Investors will track AI-related revenue and spending by tech giants. Microsoft, Meta, and Google are expected to discuss AI consumption and investment strategies.
TikTok's Fate
TikTok's status in the US remains uncertain, with Trump's actions potentially benefiting competing apps like Instagram and YouTube.
Key Players to Watch
Meta and Microsoft will release earnings on Wednesday. Other major tech companies, including Amazon, Google, and Apple, will follow suit in the coming weeks.
Analyst Outlook
* Jefferies analyst Brent Thill anticipates improved AI consumption and continued spending from Microsoft.
* Meta's cap-ex spending is expected to increase, potentially affecting its profitability.
* Google and Amazon have outperformed expectations in cloud and overall margins, respectively.
Investor Sentiment
Microsoft's stock has lagged the broader market, while Amazon and Google have seen significant gains. Investors will assess company guidance and financial results to gauge future performance.