Big Tech Earnings Preview: AI and Tariffs in Focus

Earnings season is in full swing once again.  

This week, investors are gearing up for reports from four members of the ‘magnificent seven’: Microsoft [MSFT], Meta Platforms [META], Apple [AAPL] and Amazon [AMZN]. 

The market will closely monitor the impact of trade tariffs announced in April. The April-to-June quarter of 2025 marks the first period during which the newly introduced tit-for-tat tariffs were in effect. 

Margins will be key metrics, as investors look for signs that tariffs may be starting to erode profits.

Other major discussion points for the earnings calls for these big tech firms include artificial intelligence (AI) and cloud-related earnings growth.

Source: Yahoo Finance

Microsoft: Azure, Copilot and AI Investment in the Spotlight

Microsoft is set to report Q4 earnings after the closing bell on July 30, and analysts are anticipating yet another strong quarter from the tech giant. 

Investors will watch for updates on the company’s expanding partnership with OpenAI and the commercialization of the human-AI agent collaboration tool, Copilot.

The company expects its productivity and business processes segment — which accounted for 42.65% of quarterly revenue in the preceding quarter — to grow at a rate of 11–12%. Meanwhile, revenue from Intelligent Cloud, which includes Azure and other cloud services, is expected to be in the range of $28.75–29.05bn, representing growth of 20–22% growth.

If Alphabet’s [GOOGL] strong June quarter earnings are anything to go by, then Microsoft may be on an upward trajectory. Alphabet posted a 32% jump in cloud revenue and raised capital expenditure guidance to $85bn, citing strong demand for its cloud platform.

Microsoft did note in April that demand for data center was growing “a bit faster” than capacity. 

MSFT shares are up 22.34% in the year to July 25.

Meta Platforms: Long-Term AI Ambitions, Short-Term Tariff Headwinds

AI is a major theme for Meta Platforms. The company has made headlines by aggressively headhunting AI talent, including through acquisitions such as its $14.3bn investment in data-labeling start-up ScaleAI.

With AI still a medium- to long-term growth story, analysts are expecting a mixed Q2 from Meta due to macro uncertainty and shifting advertiser behavior. 

Meta said in April that Asia-based e-commerce exporters have reduced their ad spend in the US due to trade tariffs introduced by the Trump administration. While some of this spending has been redirected to other markets, overall spending of Asia-based e-commerce exporters remains below pre-April levels.

As a result of this tariff-related uncertainty, Meta provided a wider-than-usual $3bn revenue guidance range for Q2, with revenue expected to be between $42.5bn and $45.5bn. Nevertheless, the lower range of Q2 revenue forecast is higher than $42.31bn reported in the preceding quarter and $39.07bn reported in the same quarter in 2024.

On the capital expenditure front, Meta continues to ramp up investment in AI infrastructure. The company is spending billions of dollars to build AI data centers, the first of which, named Prometheus, is expected to come online in 2026. Meta views in-house infrastructure and compute expansion as critical to advancing both its core advertising/recommendation engine and its broader AI technology roadmap.

META shares are up 21.92% in the year to date.

Meta will report Q2 earnings on July 30.

Apple: Tariffs Weigh Heavy

Apple’s share price has underperformed those of its magnificent seven peers in 2025, with the market expecting the iPhone maker to be the most heavily affected by tariffs introduced on goods shipped to the US from China. 

Apple sells over 60 million iPhones in the US every year, 80% of which are made in China. In May, CEO Tim Cook warned that the company was anticipating a $900m increase in costs due to tariff policies at the time.

However, the actual impact of these tariffs on Apple’s bottom line is difficult to quantify, given that trade discussions between the US and China are still ongoing. In a temporary de-escalation, the two nations agreed to a 90-day tariff reduction starting May 14, lowering additional tariffs on Chinese imports from 145% to 30%.

Apple has since rushed to import made-in-India iPhones to the US. In April, Apple reportedly chartered cargo flights to carry as many as 1.5 million iPhones from India to the US in a bid to sidestep the new tariffs. This came after a record $2bn worth of iPhones were shipped from India to the US in March. 

Has Apple managed to soften the blow from the US-China trade conflict, at least for now? Investors will be watching the upcoming June quarter earnings report closely to assess not only the direct cost impact of the tariffs, but also the financial implications of relocating production out of China. As mentioned earlier, profit margins will be a key metric under scrutiny in the upcoming report.

With shares down over 14% year-to-date, Apple will need to deliver earnings above expectations on July 31 to lift investor sentiment.

Amazon: AWS Growth Engine

Amazon is scheduled to report its June quarter earnings on July 31. Investor focus is likely to center on the company’s growing AI capabilities and potential impact from global tariffs.

Amazon Web Services (AWS), whose income is generated from compute, storage and database services, has become the company’s fastest-growing business segment. In 2024, AWS’ revenue increased 19% year-over-year to become a $100bn+ business.

CEO Andy Jassy noted that AWS has more room to grow, as 85% of global IT spending remains on-premises rather than on the cloud. Jassy added that the rise of AI technologies could push AWS’ revenue run rate even higher than previously expected, which has prompted Amazon to invest aggressively in AI. Amazon’s AI initiatives now span fulfillment networks, robotics, agents, shopping, advertising and generative AI applications.

That said, some analysts have raised concerns about the surge in AI-related capital expenditures, as Amazon keeps pace with rivals. Free cash flow will be a key metric to monitor. Amazon saw a big drop in free cash flow at the end of the March quarter to $25.93bn, from the $50.15bn reported in March 2024.

On the tariff front, Jassy said that there will be “plenty of sellers” who will pass on higher costs to end consumers, which could weigh on consumer spending. However, the recently concluded Amazon Prime Day event suggested continued consumer resilience, with US sales projected to be 28.4% higher year-over-year.

It’s worth noting, though, that the 2025 Prime Day event lasted four days, compared to just two days last year. Income from the Amazon Prime Day event held in July will be accounted for in the September quarter.

AMZN shares are up 5.49% year-to-date.

Conclusion

The upcoming earnings from Microsoft, Meta Platforms, Apple and Amazon will provide key insight into AI investments, capital expenditure strategies and consumer trends amid evolving tariff pressures.