Alphabet and Tesla kick off tech megacap earnings this week amid record Nasdaq gains and Wall Street optimism. The next 10 days will test if the rally holds.
Alphabet’s ad business still faces headwinds from ongoing trade uncertainty. Revenue growth is forecast at a slow 11%, the weakest in two years. YouTube revenue disappointed last quarter, and tariffs, especially from Asia-Pacific retailers, continue to pressure sales. AI is expected to provide a boost, with analysts noting improved ad spend returns and a “multi-year transformation” in search. Cloud and Waymo’s robotaxi service remain key focus areas.
Tesla is the sector’s laggard, with shares down 17% this year. Q2 deliveries dropped 14%, marking a second consecutive decline. Automotive revenue fell 20% Q1, and similar drops are expected. Tesla faces fierce competition from cheaper EV alternatives abroad. Musk’s recent split with Trump adds political drama ahead of the earnings call. Investors will watch for updates on Tesla’s affordable EV promises and its fledgling robotaxi service in Austin, which Bank of America analysts call “immaterial” financially. 
Meta CEO Mark Zuckerberg’s aggressive AI spending is under scrutiny. The company bought Scale AI CEO Alexandr Wang and top talent for over $14 billion. Meta plans "hundreds of billions" in AI infrastructure investments and launched Meta Superintelligence Labs. Q2 growth is expected at 14.5%, the slowest since mid-2023. Pressure mounts to prove AI ROI.
"While the recent talent hires and focus in this area are notable — and we expect meaningful improvements in models and user-facing applications — the road to platform leadership in AI remains long and highly competitive," analysts at MoffettNathanson wrote.
Analysts at Bank of America said they view Zuckerberg’s latest commentary as "sign of confidence" in the strength of the company’s business.
Microsoft rides strong Azure growth and AI ties with OpenAI. The company’s stock hit a record and is up 20% this year. Q2 expects ~34-35% cloud revenue growth, slightly below last quarter’s 35%. Operating expenses growth will slow after recent layoffs of 9,000 employees. Analysts await fresh guidance for FY 2026 spending around $99 billion.
Apple braces for tariff fallout. Heavy reliance on Asia makes it vulnerable to U.S. trade policies. Shares fell 15% this year. Revenue is projected to grow 4% YoY, steady with recent quarters. CEO Tim Cook warned of $900 million extra costs due to tariffs. The company is expanding U.S. rare earth materials manufacturing, signing a $500 million deal with MP Materials.
Amazon faces sluggish cloud growth and tariff uncertainty. AWS grew 17% in Q1, below estimates, with similar expectations for Q2. CEO Andy Jassy cites capacity limits in data centers and AI chip shortages. Tariffs and recession fears add pressure, but Jassy remains confident in Amazon’s pricing power and market share gains. Shares are up about 4% this year.
Earnings season starts Wednesday with Alphabet and Tesla. Meta and Microsoft follow next Wednesday. Apple and Amazon report the day after. Nvidia waits until late August.
Watch this space.
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