Wedbush Securities is predicting robust earnings results for tech giants Microsoft, Meta, Amazon, and Apple as they prepare to report their latest quarterly figures.
Despite ongoing tariff concerns, analyst Dan Ives believes that these companies will deliver strong performances, driven by resilient demand trends in cloud computing, digital advertising, and enterprise AI deployments.
Strong Demand Trends Across Big Tech
Microsoft and Amazon are expected to benefit from a surge in cloud spending, with their hyperscale cloud services continuing to drive growth.
Microsoft’s Intelligent Cloud division, which includes Azure, is projected to see significant revenue increases, while Amazon Web Services (AWS) remains a leader in cloud infrastructure. Meta, meanwhile, is poised to capitalize on a rebound in digital advertising, with its Advantage+ program and updates in Business Messaging contributing to improved ad spending.
Apple, though facing potential headwinds from tariffs, is expected to maintain its strong brand loyalty and ecosystem advantages. Wedbush remains optimistic about Apple’s ability to weather tariff challenges, citing its massive installed base of iPhones and iOS devices, as well as its growing Services business.
Tariff Concerns and AI Focus
While tariffs remain a significant concern, particularly for Apple, which could face a 15-20% hit to its 2025-26 numbers if tariffs persist, the focus on AI and cloud spending is seen as a key driver of growth.
About 15% of IT budgets are now dedicated to AI, and these investments are being fiercely defended by CIOs and IT leaders. This strategic focus on AI and cloud is expected to help these tech giants maintain momentum despite broader economic uncertainties.
Analyst Sentiment and Market Outlook
Analysts polled by Visible Alpha and FactSet have set high expectations for these companies. Microsoft is projected to report earnings per share of $3.22 on revenue of $68.43 billion, reflecting a 10.6% year-over-year increase.
Meta’s earnings are expected to rise by 11%, driven by improved ad revenue. Amazon’s cloud and advertising segments are also anticipated to perform well, with the company maintaining a strong position in the digital advertising space.
Overall, Wedbush’s bullish outlook on these tech giants reflects confidence in their ability to navigate current challenges while capitalizing on emerging trends in AI and cloud computing.
Strong earnings results from these companies could serve as a confidence booster for the broader tech sector, potentially offsetting some of the negative impacts of tariffs and economic headwinds.