Big Tech Earnings: 3 Key Investor Questions This Week

The second quarter earnings season is heating up this week, with tech giants like Microsoft, Apple, Amazon, and Meta slated to report. Investors are keenly watching for updates on artificial intelligence investments and how these companies are leveraging the transformative technology. Trade policy is also a significant concern, especially for Apple and Amazon, with their calls scheduled for Thursday.

Microsoft and Meta will kick off the major tech earnings reports after the market closes on Wednesday. While Alphabet (GOOGL) and Tesla (TSLA) have already shared their results, Nvidia (NVDA) remains the last of the “Magnificent 7” group, with its report due in late August.

What’s the latest on AI spending and monetization?

Investors are eager to see if big tech’s AI investments are paying off.

• Four major tech companies—Microsoft, Apple, Amazon, and Meta—report earnings this week.
• Artificial intelligence investments and monetization strategies are key investor focus points.
• Trade policy remains a significant concern, particularly for Apple and Amazon.
• Alphabet recently raised its capital expenditure forecast to $85 billion, citing cloud demand.
• Apple estimated tariffs would add $900 million to its costs in the second quarter.

Six months ago, the debate on Wall Street centered on whether U.S. tech companies were overspending on artificial intelligence. That question seems to have quieted down for now. Alphabet, for instance, recently increased its full-year capital expenditure forecast to $85 billion, driven by strong demand for cloud computing. The company’s cloud division saw growth exceeding 30% year-over-year, positioning it for over $50 billion in revenue within the next year.

Microsoft and Amazon, both significant cloud competitors, might follow Alphabet’s lead in boosting their capital expenditure forecasts. Both companies maintained their previous projections three months ago, possibly influenced by prevailing trade and economic uncertainties. With some of that uncertainty seemingly resolved by trade agreements, they might feel more comfortable increasing AI investments.

Meta, which raised its capital expenditure outlook last quarter, could do so again. The social media giant has a history of adjusting its forecasts upward, having done so in both the first and second quarters of the previous year.

Are AI investments translating into revenue and efficiency?

Investors are seeking concrete evidence that substantial AI investments are yielding positive results. Alphabet CEO Sundar Pichai noted that “AI is positively impacting every part of the business, driving strong momentum.” Executives further explained that Google is monetizing AI-powered search results similarly to traditional search, and that AI overviews are boosting search volume.

Meta has successfully demonstrated to Wall Street in recent quarters how AI is enhancing ad performance and user engagement. This week’s results will be scrutinized to confirm that Meta’s AI investments continue to deliver tangible benefits.

Amazon may provide updates on customer interaction with its AI shopping assistant, Rufus, and its work assistant, Q. Microsoft is also expected to detail the adoption rate of its Copilot AI offering.

For Apple, however, analysts suggest investors might need to wait for more specific details. Morgan Stanley analyst Erik Woodring anticipates no updates on Apple Intelligence timing (set for 2026), material changes to quarterly capital expenditures, or news regarding China’s approval of Apple Intelligence or new partnerships. However, he noted that management might report faster product sales growth in regions where Apple Intelligence is enabled compared to non-AI regions.

How are major tech companies navigating tariffs?

Apple investors, in particular, are likely more focused on tariffs than many of their “Magnificent Seven” peers. While President Donald Trump exempted smartphones and consumer electronics from broad “reciprocal” tariffs in April, his administration is reportedly considering national security-based Section 232 duties on smartphones and semiconductors. These tariffs have historically withstood legal challenges more effectively than country-specific ones, potentially making them harder for Apple to circumvent.

Even with the earlier exemption, Apple estimated in May that tariffs would increase its second-quarter costs by $900 million. Investors will be watching to see the actual financial impact and how Apple is working with suppliers and the administration to mitigate these costs.

Trade policy is also a key concern for Amazon investors. In the first quarter, the company observed customers stocking up in anticipation of tariffs, which could lead to a sales slowdown. While merchants did not significantly raise prices in the first quarter, executives indicated this could change depending on future tariff rates.