Big Tech’s earnings season is in full swing. And while we’ve still got a few weeks left before Nvidia reports its results on May 28, one major pattern is emerging. AI and advertising are dodging the impact of President Trump’s tariffs, while consumer-focused companies like Apple take the hit.
Google parent Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) all scored solid results. Alphabet raised its dividend and authorized an additional $70 billion in stock buybacks, Meta provided strong guidance for the current quarter, and Microsoft pointed to healthy cloud sales. Amazon offered a lighter-than-anticipated outlook on its operating income for its second quarter, but even that didn’t shake analysts.
“[Management] noted limited direct impact from tariffs on the Q2 profit guide, driven by pre-buying inventory and limited [third-party] seller impact so far (sellers not yet raising prices),” BofA Securities analyst Justin Post wrote in an investor note following Amazon’s earnings.
And while Apple also saw better-than-anticipated EPS and revenue in its latest quarter, the company warned that it will take a $900 million charge in its current quarter. CEO Tim Cook also noted the outlook for the June quarter remains murky.
“There remains plenty of uncertainty on the tariff cost impact beyond the June [quarter], but we are assuming a 30% China tariff and 10% tariff for the [rest of the world], with Apple able to partially mitigate these tariffs, resulting in a 45.3% gross margin in the Sept [quarter],” Morgan Stanley’s Erik Woodring wrote in an analyst note.
It’s a sign that Big Tech’s cloud and AI giants are navigating the current economic environment with relative ease, while Apple is forced to pull as many levers as possible to avoid a damaging blow amid the Trump administration’s ever-changing tariff policy.
And it won’t get any easier until Washington provides some long-term clarity.
Read more: What Trump’s tariffs mean for the economy and your wallet
One of the main concerns going into Big Tech’s earnings season was whether advertising and AI spending would keep pace in the face of tariff fears. And, luckily for the likes of Alphabet, Amazon, Meta, and Microsoft, they did just that.
Alphabet’s advertising revenue topped expectations, and while cloud revenue was a hair shy of Wall Street’s estimates, analysts weren’t concerned, as the company, like its rivals, is contending with more AI demand than it can handle.
“And given that revenues are correlated with the timing of deployment of new capacity, we could see variability in Cloud revenue growth rates, depending on capacity deployment each quarter,” Alphabet CFO Anat Ashkenazi explained during the company’s earnings call. “We expect relatively higher capacity deployment towards the end of 2025.”
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