Big Tech earnings kick off as tariff uncertainty continues to roil markets
April 23, 2025
Silicon Valley's biggest companies begin a cavalcade of earnings announcements this week, when Google (
GOOG
,
GOOGL
) parent Alphabet and Intel (
INTC
) report their results after the bell on Thursday. But this earnings season comes with a container ship's worth of baggage in the form of President Trump's ongoing global trade war.
Tech stocks have plummeted since the president's April 2 "Liberation Day" event that imposed a base 10% tariffs on all countries and additional reciprocal tariffs on a slew of others. As part of the move, Trump has ordered a 145% tariff on goods from China. And while products like smartphones and laptops are temporarily exempt from the duty, the administration says they'll be subject to future tariffs related to semiconductors that are expected in the coming weeks.
Adding to investors' agita, Trump on Monday continued his attacks on Fed Chair Jerome Powell in a post on Truth Social, raising fears that the president will seek to oust him after threatening to do so last week. The three major indexes fell more than 3% following the president's remarks.
Trump telegraphed his tariff plan ahead of his April 2 announcement, which allowed some companies time to make preemptive adjustments to shipments and get devices into the US before they were subject to the duties. While that should help consumer and enterprise customers, it could also inflate tech companies' bottom lines in the quarter, warping comparisons in the coming months.
And without a clear timeline for when or if the tariff war will end, tech companies could hold back on providing forward-looking guidance.
It all makes for what is shaping up to be one of the more consequential earnings seasons for Big Tech in recent memory.
Google and Meta face potential ad headwinds
Google and Meta (
META
), which report earnings on April 24 and April 30, respectively, are staring down the potential for an ad sales slowdown in the wake of Trump's tariff moves as advertisers pull back on spending. BofA Securities analyst Justin Post said in an April 9 investor note that brand budgets could fall by 15% to 20% while direct-response marketing budgets could fall by 4% to 5%. Trump announced his 90-day pause on tariffs the same day.
"Our recent March channel checks, before the 4/2 tariff announcement, suggested potential ad spending risk from negative economic headlines ... and we think the pressure on ad spend has likely intensified in April," Post wrote.
"Historical data indicates a strong correlation between online advertising industry spend and GDP. Higher tariffs on imports seem likely to drive up inflation, lower advertiser sales expectations, and drive a pullback in brand ad spending, in our view."
On top of that, both Google and Meta are embroiled in antitrust battles. Last week, a federal judge ruled that
Google holds an illegal monopoly
in the online ad business, the company's second antitrust loss in less than a year.
Meta CEO Mark Zuckerberg, meanwhile,
took the stand to defend the company
in its own antitrust trial. Though the drama shouldn't impact either company's earnings report, it only adds to the mounting turmoil.
Chip bans and tariffs
Chip companies including AMD (
AMD
), Intel, and Nvidia (
NVDA
) are also facing their own troubles heading into earnings. Intel kicks things off on Thursday, marking CEO Lip-Bu Tan's first report as the company's chief executive.
According to KeyBanc analyst John Vinh, Intel could announce a pull forward in Q1 sales when it reports on April 24 as customers tried to get orders in ahead of tariffs.
"For computing, we expect [Intel] to report higher results and higher guidance, as channel feedback indicates pull-ins in PCs/servers to avoid tariffs and stronger than expected server demand trends," Vinh wrote in an investor note.
"However, aggressive price cuts in Lunar Lake CPUs in the range of 20%-40% will limit trajectory for [gross margin] recovery but has resulted in market share gains."
Intel does have the benefit of manufacturing many of its chips in the US, but it and AMD could take a hit if Trump decides to impose tariffs on laptops and desktops along with semiconductors and customers cut back on their purchases.
The companies also have to deal with the coming AI diffusion rules that require certain countries to get licenses to receive a limited number of high-powered AI chips. Republican senators have asked Trump to repeal the rules, which the Biden administration set in place just before leaving office.
AI spending
Amazon (
AMZN
), Google, and Microsoft (
MSFT
) rode the AI hype train throughout 2024, but 2025 hasn't been as kind for their stock prices. And tariff uncertainty could hurt revenue as customers pull back on spending. Amazon reports its earnings on May 1. Microsoft reports on April 30.
"We estimate that 10%-15% (could be conservative) of many cloud and AI initiatives in the US we are tracking in the field could be pushed/slowed down during this period of uncertainty and Microsoft will be front and center in this economic period of uncertainty," Wedbush analyst Dan Ives wrote in an investor note.
And on Monday, Raymond James analyst Josh Beck downgraded Amazon's stock on limited AI monetization progress.
Jefferies analyst Brent Thill, for his part, wrote in a note to investors that conversations with a major Google Cloud Platform partner indicated that cloud customers are putting purchases on hold, though not canceling them outright. Still, he added, a representative at an unnamed international AI company said they've seen "strong demand" from Canada and EU-based customers due to political tensions with the US.
Apple's iPhone problem
Apple (
AAPL
), which reports on May 1, is among the most exposed to tariffs of its Big Tech cohort. The company has a massive manufacturing base in China, and while it has been moving more of that to regions including India and Vietnam, heavy duties spell trouble for the business.
The company is currently exempt from tariffs on phones and computers, but that could change when Trump puts chip tariffs in place.
According to Reuters
, Apple airlifted 600 tons of iPhones from India to the US to avoid paying the extra duties. But if Trump drops the exemptions, even trying to get iPhones to the US from India rather than China won't save Apple from Trump's tariffs.
"No US tech company is more negatively impacted by these tariffs than Apple with 90% of iPhones produced and assembled in China," Ives wrote in an investor note.
Before Trump put exemptions into effect, Ives estimated that Apple would have to ramp up iPhone prices to more than $2,000. And if the same tariffs come back when Trump launches his duties on semiconductors, we could see just that.
It's going to be an interesting earnings season, to say the least.
