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Today kicks off a crucial Big Tech earnings period, with Apple, Amazon, Meta, and Microsoft all set to report in the next three days.
Perhaps more important, these companies’ CEOs will speak about the state of the economy and how they’re faring amid the trade war. Already on Tuesday, Snap Inc. told investors it had experienced “headwinds’ to start the second quarter, contributing to a nearly 14% share price decline today. And things could get ugly if the bigger companies report similar concerns.
That’s why I said near-term uncertainty is fine for Big Tech on CNBC’s Closing Bell earlier this week. If Big Tech is still in wait-and-see mode, that means tariffs and a shrinking U.S. economy have not yet meaningfully hurt their business. But if there’s already tangible negative news to report, look out below.
I typically don’t send out earnings previews, but this is a special quarter. Take a look below for my perspective on the big tech companies reporting this week — for information purposes, not investing — along with some important facts and figures at the end.
Earnings Date: May 1
Expected Revenue: $93.56 billion
Expected EPS: $1.60
Stock performance year to date: -13%
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For Apple, tariffs are a two sided problem: Its supply chain is in flux due to the uncertainty. But the China market may also be less enthusiastic about its products. China made up 17% of Apple’s revenue in 2024 and declining interest from consumers in China may cause growth problems for years. Tim Cook will have to address this in post-earnings analyst call, so keep an eye out for China demand. It could be a lingering problem even if the trade war ended today.
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Apple is currently restructuring its AI team, which is not a promising development ahead of WWDC, nor a sign that Apple Intelligence will lead to an iPhone super-cycle anytime soon. The company needs to get its AI effort back on track, but it will likely remain a non-factor through the rest of this year, and especially in Q1.
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Apple’s manufacturing pivot to India could help it mitigate the worst effects from the tariffs, especially if the U.S. makes a deal with India, but it won’t be easy to move everything over from China. As Tim Cook has said, China’s expertise in tooling is hard to match, and you can’t expect to replicate that elsewhere overnight.
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