Big Tech Earnings Season Heats Up Amid Trump's Impact and AI Surge
Big Tech's earnings season commences next week, with major players like Apple (AAPL), Meta (META), and Microsoft (MSFT) reporting their financial results.
Trump's Influence
The newly inaugurated President Trump's policies will cast a shadow over earnings. Investors and analysts will scrutinize how companies navigate proposed tariffs on Chinese goods, export controls, and antitrust regulations.
AI Revenue and Spending
AI remains a key focus for tech companies. Investors anticipate updates on their revenue and spending related to AI technologies and infrastructure. Microsoft is expected to report growth in AI consumption and spending. Meta's recent earnings report raised concerns about its increasing capital expenditures for AI initiatives. Google and Amazon have impressed investors with their cloud revenue and margin improvements.
TikTok's Fate
The potential ban on TikTok in the US looms large. Meta and Google could benefit from increased users and advertising revenue if TikTok is removed. Trump has expressed support for keeping TikTok operational, which could hinder competitors like Facebook and YouTube.
CHIPS Act Uncertainty
Companies like Intel and TSMC will be monitored for their views on the CHIPS Act, which Trump has criticized. The legislation aimed to support domestic semiconductor manufacturing but faces uncertainty under the new administration.
Market Performance
Over the past 12 months, Meta shares have risen 64%, while Amazon and Google have gained 50% and 34%, respectively. Microsoft's shares have lagged behind, showing a modest 12% increase.
Analysts' Expectations
Jefferies analyst Brent Thill anticipates strong AI-related performance from Microsoft. Investors will also keep an eye on companies' plans for data center expansion and the development of AI models.
Conclusion
Big Tech's earnings season promises to be impactful, with the influence of President Trump and the rapid evolution of AI technology at the forefront. Investors will closely monitor these companies' responses to the shifting regulatory and economic landscape.