The last time Big Tech has achieved profits, Donald Trump has just started his term, and the stocks were rising to the expectations of the government’s pro -growth agenda and anxiety of investors is the period that companies would take to convert artificial intelligence spending into profits.
After three months, they face a much bleak picture.
The quarterly results of this week from Microsoft Corp, apple a company., Definition platforms Company and AmazonThe .com Inc will fall into a moussa market with every development in the trade war that has been scanned 5.5 trillion dollars from the S& P 500 index. Amnesty International Fears have occupied a rear seat to calm the possibility of recession caused by the customs tariff, while safe havens such as gold have become a trade for investors who have shook to buy shares at a cheap price.
Even with every case of uncertainty, Wall Street does not give corporate estimates a lot of spaces. Analysts expect the so-called wonderful seven-which also includes the mother’s alphabet of Google, Timing Company and Nafidia Corp. – To offer 15 % profit growth in 2025, and it is a expectation that barely buddly joking since the beginning of March despite tension in trade tensions.
This raises the risks for the four Megacaps that reports this week, which collectively enjoy a rate of approximately 20 % in the S&P 500 index. Traders are unlikely to forgive profits deficit in the already fearful market climate, despite sharp declines in stock prices in stocks and improving assessments. The terrible expectations of the industry giant will also be received badly, especially if they are enhancedFearsFrom the silent spending of the next companies.
“Any equivalent to a weaker number of expected will lead to more sales due to concern about the tariffs,” said Phil Blanctu, Chief Market Expert at OSAIC Wealth, who believes this year’s twice in Megacaps is the opportunity to buy.
The markets got an early reading about the possibility of large technology last week. I mentioned TeslaThe worst quarterWithin years, although traders chanted signs that CEO Elon Musk intends to move away from his government work and focus more on the electric car maker. alphabetOvercoming expectationsBut he presented a little direction in the future. The wonderful Bloomberg 7 index jumped by 9.1 % last week amid a wider market recovery, although it still decreased by 15 % in 2025.
Profits and spending
A deepest look comes during a two -day extension that starts with results from Meta and Microsoft on Wednesday. While many CEOs refused to predict how to affect the definitions on their lower lines, Wall Street does their mathematics. Based on a 22 % tariff rate similar to the Bloomberg economy, a decrease in the total margin can lead to a 7 % decrease in net income in 2025 for S&P 500, compared to the current unanimity estimate of about 12 % of growth, Gina Martin Adams, the strategic head of the intelligence strategy in the field of intelligence.
Another major focus is its spending: the four largest spending – Microsoft, Alphabet, Amazon and Meta – are expected to pour nearly 300 billion dollars in capital expenditures in the current financial years. While companies pledged to maintain this pace in 2025, Microsoft’s’SuddenStopping work in some databases indicates that cloud service providers may reassess expenditures.
Apple, one of the companies most exposed to customs tariffs due to the dependence of the supply chain on China, may benefit from the demand for consumers who seek to avoid high prices. However, these sales are seen as one time benefit, with a tariff for future quarters. Amazon faces the risks of customs tariffs on e -commerce and advertising, although success in profits can be expanded through profits in the high -margin web services unit, according to Jefferies Brent Thill analyst.
However, there are few expectations that CEOs will be able to provide estimates of any degree of confidence, given the high level of total economic uncertainty. American Airlines Group Inc. And skates USa Inc. Among the companies that have itLeftThe expectations of this quarter.
Michael School, founder of the ION Macro Fund, said it would be difficult for executives to persuade the market that they have a real view of financial performance in the coming quarters.
“I think the most experienced administration will not even try,” he said.
From the upscale argument, of course, the sites of industry dominated the technology and strong public budget giants make it more suitable to bear the economic shrinkage of other companies – even if the profit image is cloudy. Also, the wonderful seven are also richer after the last sale: Alphabet, for example, circulating with profits 17 times estimated at the next 12 months, compared to the average of the past decade than 21 times, according to the data collected by Bloomberg.
This can enhance the attractive attractiveness of the seven buyers, especially if signs of mitigation appear in the World Trade War. A flash came from that week, when the shares rose after TrumpHe saidAn agreement with Beijing would significantly reduce the definitions he posted on Chinese goods.
But for Keith Lerner, co -investment official and market strategy head in Truist Consulting, all of this is due to the price ratio to profits.
“The assessments have become more interesting here, but we have not yet pulled the trigger,” he said. “There are many questions on the electronic side of the equation.”
This story was originally shown on Fortune.com
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