Diverging strategic priorities and guidance reflect varied growth drivers across Big Tech. Among major tech players, Microsoft, NVIDIA, and Amazon issued strong guidance, reflecting robust momentum in key segments. Microsoft projects 4Q25F revenue of USD73.15–74.25bn (13–15% y/y growth), driven by continued strength in M365, LinkedIn, Dynamics, and a 20–22% y/y growth outlook for its Intelligent Cloud segment. NVIDIA guided for a strong 1Q26F, with revenue of USD43.0bn (+/–2%) and record gross margins (GAAP 70.6%, non-GAAP 71.0%), underpinned by sustained AI demand. Amazon forecasts 2Q25F net sales of USD159–164bn (7–11% y/y growth) and operating income of USD13–17.5bn, despite a modest FX headwind.
In contrast, Apple, Meta, Alphabet, and Tesla issued more cautious guidance. Apple anticipates low- to mid-single-digit revenue growth for 3Q25F and is managing a USD900mn tariff-related cost, though it still targets gross margins of 45.5–46.5%. Meta guided 2Q25F revenue between USD42.5–45.5bn, with a 1% FX tailwind, but highlighted regulatory risks from the EU’s Digital Markets Act, which could impact user experience. Alphabet warned of a minor 2025 headwind to its Ads business due to the removal of the US de minimis exemption, affecting APAC-based retailers. Tesla issued the most cautious outlook, citing brand pressure, tariff risks, and ongoing supply chain vulnerabilities across both its automotive and energy divisions.
Expect strong earnings momentum across major tech platforms driven by cloud, AI and operating leverage. Major players Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla reported mixed but broadly resilient earnings in 1Q25/3Q25. Most met or exceeded consensus estimates, driven by strength in cloud services, advertising, and cost discipline. Margin expansion, favourable segment mix, and lower-than-expected tax rates notably contributed to earnings beats, particularly for Meta, Amazon, and Microsoft. Key revenue drivers include AI infrastructure, cloud platforms, and monetisable data assets, while product refreshes and improved hardware mix supported Apple’s top-line growth.
In terms of outlook, Microsoft, Amazon, and Alphabet remain well-positioned to benefit from sustained AI and cloud adoption. Apple remains supported by record Services revenue and strong iPhone performance, though FX and seasonality may weigh on near-term hardware margins. Meta continues to scale its advertising business with AI-driven improvements, while facing losses in Reality Labs. Tesla, however, remains an outlier, missing expectations due to weaker deliveries and rising operating expenses tied to R&D and AI development.
Prefer players with AI and Cloud strength with solid earnings momentum – Microsoft remains a top pick among large-cap tech names, backed by strong guidance, consistent earnings delivery, and leadership in AI and cloud adoption. The company expects 4Q25F revenue growth of 13–15% y/y, with strong demand for Azure and M365 driving the intelligent Cloud and Productivity segments. Microsoft also benefits from operating leverage, favorable mix, and expanding use cases for enterprise AI. We expect Microsoft’s superior fundamentals and alignment to key tech trends will continue to drive outperformance relative to peers.
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