Latest news with #TechEarnings
Yahoo
5 days ago
- Business
- Yahoo
AI trade takes center stage as Big Tech earnings season kicks off
Tech earnings season kicks off in earnest on Wednesday, when Google parent Alphabet (GOOG, GOOGL) reports its results after the bell. And Wall Street's two favorite letters will once again dominate the conversation: AI From continued capex spending to questions about if and how those huge cash outlays are driving new revenue streams, AI will seemingly be all investors and analysts talk about. But Big Tech companies are also facing a variety of additional challenges this quarter, ranging from Google's antitrust trial to Microsoft's (MSFT) relationship with OpenAI ( to Apple's (AAPL) ongoing AI troubles. And while AI darling Nvidia (NVDA) won't report its earnings until Aug. 27, leaving the most anticipated disclosure of the season more than a month away, there will be plenty of news and announcements to track in the interim. And it's certain to make for a busy earnings cycle. AI sales growth is still at the center of the conversation Big Tech's billions of dollars in investments into AI data centers helped power Nvidia's massive growth over the past few years, but Wall Street is looking to see how much that spending is paying off. During Amazon's (AMZN) last earnings call, CEO Andy Jassy said the company's AI business "has a multibillion dollar annual revenue run rate, continues to grow triple-digit year-over-year percentages, and is still in its very early days." What's more, Jassy said prior to the latest generation of AI, Amazon believed AWS had a chance to be a multi-$100 billion run rate business, and now the company believes it can grow even more beyond that. But Amazon will need to show off how exactly it plans to get there to keep investors happy when it reports on July 31. Google, which reports today, and Microsoft, which reports July 30, will also have to prove their AI plans are paying dividends. Google has added its Gemini model to its Workspace productivity software and across its search products, including its AI Overviews and AI Mode. Read more: Live coverage of corporate earnings During the company's Q1 earnings call, senior vice president and chief business officer Philipp Schindler said AI Overviews searches monetize at the same rate as standard search queries, which leaves room for improvement. The company said its AI expansion and Google Cloud Platform Core products also helped power a 28% increase in its Cloud segment revenue. But questions remain about how it will successfully monetize its AI Mode offering and fend off challenges from OpenAI, Anthropic ( and Perplexity ( Microsoft has benefited handsomely from its early investments in ChatGPT creator OpenAI. The company attributed 16 percentage points of growth in its Azure and other cloud services revenue to its AI offerings. It's not all sunshine and rainbows for Microsoft and OpenAI, though. The companies are at odds over how OpenAI should move forward with its plan to transform into a public benefit corporation and what that means for Microsoft's equity in the new organization. Then there's Meta (META), which said it's already seeing positive signs from its AI investments, including longer user engagement and its advertising business. "We're testing a new ads recommendation model for Reels, which has already increased conversion rates by 5%," CEO Mark Zuckerberg said during the company's last earnings call. "And we're seeing 30% more advertisers are using AI creative tools in the last quarter as well." And the company isn't letting up on spending. Last week, Zuckerberg said Meta will spend hundreds of billions of dollars on data centers, including one that will be as large as a chunk of the island of Manhattan to power what the executive refers to as "personal" superintelligence. What exactly that means remains to be seen. Hopefully, Zuckerberg will add clarity when the company reports its results on July 30. Apple's AI conundrum Apple's earnings will focus on iPhone sales, as they always do, but investors will also be looking for insights into CEO Tim Cook's plans to expand his company's AI capabilities. So far, Apple, which also reports on July 31, has rolled out its Apple Intelligence platform across its various hardware offerings, but it still hasn't managed to impress Wall Street due to delays in its AI-powered Siri. According to Bloomberg's Mark Gurman, the company is considering using third-party AI models to bring Siri up to speed with the latest AI functionalities, but there's no word from Apple on the potential move. Apple rivals Google and Samsung, meanwhile, have been releasing ever more advanced AI capabilities via Google's Gemini AI, putting further pressure on the iPhone maker. Compounding Apple's AI issues is the fact that Apple is losing AI talent to its competitors. According to Gurman, Ruoming Pang, Apple's head of AI models, left the company for Meta. Two other Apple AI employees, Mark Lee and Tom Gunter, followed shortly thereafter. While Apple is unlikely to announce any big AI plans during its earnings call, it will be interesting to see if Cook provides deeper insights into how customers are using Apple Intelligence and their overall satisfaction rate. Nvidia is earnings season's main event Nvidia will close out Big Tech's earnings when it reports after the closing bell on Aug. 27. It's hard to overstate how big Nvidia's earnings announcements have become. The company surpassed the $4 trillion market cap mark in July and doesn't appear to be slowing down anytime soon. Nvidia continues to power the explosion in AI data center construction, with companies like xAI regularly touting how many Nvidia chips they're acquiring to build out their supercomputing projects. And with the company expanding into sovereign AI, with plans to sell thousands of AI chips to Saudi Arabia, it's staring down a broader market opportunity. It also doesn't hurt that the Trump administration will greenlight the sale of its H20 chips to Chinese companies after previously barring them. That should help offset the $4.5 billion write-down the company took in Q1 due to the White House's initial sales ban and the $8 billion hit it projected for Q2. It all should make for an interesting end to earnings season, and it starts today. Email Daniel Howley at dhowley@ Follow him on X/Twitter at @DanielHowley. Sign in to access your portfolio
Bloomberg
21-07-2025
- Business
- Bloomberg
Mag 7 Earnings Preview: What to Watch for in AI, Cloud
Tech earnings kick off this week with reports from Alphabet and Tesla on Wednesday. Mandeep Singh of Bloomberg Intelligence has a preview on Bloomberg Television. (Source: Bloomberg)
Yahoo
07-07-2025
- Business
- Yahoo
European stocks' 2025 outperformance is over, but don't forget the euro
By Alun John LONDON (Reuters) -European stocks took an early lead in 2025, outperforming Wall Street thanks to erratic U.S. policymaking and Germany's once-in-a-generation fiscal shift, but U.S. markets have caught up. The broad European STOXX 600 index was up 6.6% so far this year, as of Friday's close, compared with 6.8% for the S&P 500. In March the STOXX was 10 percentage points ahead, leading European bulls to think this might be their time after years of European markets underperforming Wall Street. Calls for European outperformance still ring true in currencies, however, with the euro up 14% against the dollar year to date. Trade talks and the new U.S. tax-cut and spending law are tests for the rotation out of the U.S. and into Europe, said UBS Asset Management's head of global sovereign markets strategy Max Castelli. "I don't think U.S. exceptionalism will come back with the same strength and intensity," he said. "But I would not rule out the big period of outperformance of European assets over the U.S. being over." Here's a look at how Europe's performance against the U.S. stacks up. BIG TECH IS BACK Marija Veitmane, head of equity research at State Street Global Markets, said Wall Street shares started bouncing back in mid-April, partly because the "trade war became trade negotiations." But the "real turning point" was corporate earnings season when "tech CEOs stood up and said 'Our earnings are going to be very strong'." Tech accounts for roughly one-third of the S&P 500, and the sector is up 24% since the start of April, even including its plunge when U.S. President Donald Trump announced his tariff plans. Nvidia, once again the world's largest company by market cap, has risen an even more dramatic 45%, and there isn't anything in Europe to match. HOLD YOUR NERVE But by no means all investors are rushing back to Wall Street with the S&P 500 at record highs, suggesting valuations are getting stretched. "The tariff announcement showed how fast sentiment can change and how risky these high (U.S.) valuations are," said Madeleine Ronner, senior equity portfolio manager at asset manager DWS, adding that European valuations are more reasonable. And while that gap had been appropriate because of slow corporate earnings growth, "Europe's (earnings per share) is starting to grow again, and the differential is getting smaller, which should be reflected in valuations," she said. DWS sees U.S. and European GDP growth being roughly similar in 2025 and 2026, a further and sustainable boost to European companies' earnings. CAN YOU BUY MORE DEFENCE STOCKS? Investors have snapped up European stocks, but that has centred largely on the same sectors -- defence, up 50% this year, and banks up 28%, suggesting a lack of faith in the broader market. The two account for more than 50% of the return of the STOXX 600, despite making up just 16% of the index, BNP Paribas Exane estimates. That's not surprising as NATO members have agreed to increase defence spending, and massively in the case of Germany. But valuations are stretched. Germany's Rheinmetall trades on a forward price to earnings ratio of more than 50; even Apple and Microsoft are only around 30. LOVING THE EURO The picture is clearer in currencies, where the euro is at a near four-year high and closing in on $1.20. At the start of the year many analysts predicted the euro would fall below one dollar, thanks to what was then seen as an insatiable demand for U.S. assets. But when this reversed, the euro began to appreciate, a move that grew as foreign holders of U.S. stock and bonds, fearing further dollar weakness, increased their currency hedges. Now the euro is expected to keep gaining even if outflows from the U.S. stop. "Foreigners don't need to sell U.S. assets to weaken the dollar but merely to say 'No thank you' to buying more," Deutsche Bank's head of FX strategy George Saravelos said in a note. CURRENCIES MATTER That currency move also affects equity investors, making European stocks cheaper for U.S. investors and Wall Street more expensive from Europe. The S&P 500 may be at a record high for domestic investors, but priced in euros it's 9% off its February top. "For euro-based investors the currency ate up so much U.S. assets' returns this year," said DWS' Ronner. "If there's another letdown, in euros that gets even worse." On the other hand, the STOXX 600 in local currency terms is still shy of March's record, but priced in dollars it hit an all-time high in late June.
Bloomberg
06-06-2025
- Business
- Bloomberg
HSBC's Private Bank Turns Overweight US Stocks on AI Hopes
HSBC's private banking arm has gone overweight US stocks and neutral on those in Europe, flipping its view from earlier this year after a breezy round of earnings from US tech companies. The country's tech giants defied a recent sense of gloom on Wall Street to deliver first-quarter earnings that mostly showed strong growth despite President Donald Trump's disruptive trade policies. That cemented the private bank's enthusiasm for stocks that are likely to benefit from the artificial intelligence boom, according to Willem Sels, global chief investment officer at HSBC Global Private Banking and Premier Wealth.
Zawya
28-05-2025
- Business
- Zawya
Asian shares, U.S. dollar climb on rosy data, tech optimism
TOKYO: Asian shares continued a rally from Wall Street and the dollar held gains on Wednesday on promising economic signs in the United States and speculation of strong tech earnings. Markets welcomed what appeared to be easing trade frictions between the U.S. and Europe while global bond markets settled down after a scary surge in long-term yields. U.S. consumer confidence surprised on the upside ahead of closely watched jobs figures on Thursday. Nvidia jumped more than 4% yesterday and will be the last of the Magnificent 7 tech giants to report earnings after markets close in the U.S. "There is renewed confidence that Nvidia can beat the consensus estimates," said Chris Weston, head of research at Pepperstone. If Nvidia comes through with better-than-expected sales and profit margins "the rally is on," he added. The chipmaker is expected to report that first-quarter revenue surged 66.2% to $43.28 billion, according to data compiled by LSEG. In signs of a thaw between the U.S. and Europe, European Union officials have asked companies for details of their U.S. investment plans, according to two sources familiar with the matter. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3% in morning trading while Japan's Nikkei advanced 0.6%, climbing a fourth straight session. The dollar index, which tracks the greenback against a basket of currencies, rose 0.1%, adding to Tuesday's 0.6% rally. The greenback advanced 0.1% to $1.132 against the euro . Australian shares were up 0.17%, but the nation's currency slid 0.2% after April consumer price data came in above expectations. The kiwi dollar slid 0.3% after the Reserve Bank of New Zealand cut rates as expected. Japanese bonds slid, trimming a surge yesterday, ahead of a 40-year auction and on speculation the Ministry of Finance will reduce the issuance of long-dated securities. Oil prices ticked up in early trading as the U.S. barred Chevron CVX.N from exporting crude from Venezuela under a new authorization on its assets there, raising the prospect of tighter supply. Brent crude futures rose 0.4% to $64.37 a barrel, while U.S. Spot gold rallied 0.1% after dropping more than 1% on Tuesday.
