In This Article:
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Big Tech companies report earnings this week in a very different climate from last quarter.
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Tariffs and uncertainty are setting the mood for Meta, Microsoft, Apple, and Amazon.
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Tech CEOs, many of whom supported Trump, must convince investors they can sustain their growth.
Big Tech CEOs had seemed ready for good vibes with President Donald Trump. Instead, they're heading into their latest earnings season with a difficult task: addressing a Trump-led vibe shift that's been anything but kind to them.
This week, several tech firms, including Amazon, Apple, Microsoft, and Meta, report their latest earnings against a backdrop of uncertainty that sent their stocks plummeting and added pressure on them to deliver results on big bets like AI.
Investors and CEOs started the year with very different expectations. They had hoped for a Trump bump from deregulation, the return of dealmaking, and an overall pro-growth agenda.
"We now have a US administration that is proud of our leading companies, prioritizes American technology winning, and that will defend our values and interests abroad," Mark Zuckerberg, the CEO of Meta, said in an earnings call in January.
Despite a market sell-off in January stemming from the release of a new AI model from China's DeepSeek, there appeared to be optimism among the Big Tech CEOs who had donated to Trump's presidential campaign, lined up behind him at his inauguration, and shared investment commitments collectively worth over $1 trillion to the US.
Instead, they got tariffs and uncertainty.
Big Tech stocks have taken a beating
The pain for Big Tech has been most evident in the aftermath of Trump's "Liberation Day" tariff proposals in April, which raised fears about the long-term value of tech firms with supply chains and large customer bases in regions heavily targeted by tariffs, such as China.
Apple's share price, for instance, has fallen by almost 14% this year as its reliance on a supply chain empire in China has been called into question. Amazon is down by nearly 15%, Microsoft by more than 6%, and Meta by more than 8%.
The S&P 500 — the four Big Tech companies reporting earnings this week constitute roughly one-fifth of the benchmark index — is down by over 6% since Trump's inauguration. Trillions of dollars have gone up in smoke.
Hamish Low, an analyst at the research firm Enders Analysis, told Business Insider that the "macro uncertainty" triggered by Trump's administration would weigh on tech companies.
He said it would make investors more serious about the "questions that were already growing" about Big Tech's major bets and their potential for returns.