Tech’s megacap companies are entering first-quarter earnings season amid significant uncertainty caused by President Donald Trump’s on-again, off-again approach to tariffs. The Nasdaq has been particularly volatile, experiencing five days of massive moves as investors try to gauge the future impact on revenue and earnings for American companies relying on imports.
Key Companies Affected
Tesla kicks off tech earnings on Tuesday, followed by Alphabet on Thursday. Other major companies reporting include Meta, Microsoft, Amazon, Apple, and Nvidia. All of these megacap companies have significant exposure to Trump’s sweeping tariffs, which will be a major topic on earnings calls.
Tariff Uncertainty
Trump’s tariffs face almost universal disapproval in the corporate world. The tariff picture changes daily, making it almost impossible for companies to plan for the future regarding manufacturing, hiring, and marketing products. On April 9, Trump dropped tariffs to 10% for most trade partners for 90 days to allow negotiations. The administration signaled exemptions for phones, computers, and chips, but Trump later cast doubt on these exemptions’ duration.
Company-Specific Concerns
Tesla
Tesla relies on suppliers in Mexico and China for essential parts. The company has sought an exemption from the U.S. trade representative for equipment imported from China. Analysts project revenue growth of less than 1% from a year earlier for the first quarter.
Alphabet (Google)
Google faces an online ad market on edge due to concerns about Trump’s tariffs affecting the economy and business spending. The company is a massive spender on imported data center infrastructure and plans to spend $75 billion this year on servers and data centers.
Meta
Meta’s advertising revenue is exposed to potential tariff impacts on the economy and business spending. The company has significant China-based advertising revenue, with $18.35 billion in 2024 representing over 11% of total sales.
Microsoft
Microsoft derives most of its revenue from selling software but buys hardware for cloud services, which is subject to higher costs due to tariffs. The company aims to spend over $80 billion this fiscal year on data centers capable of handling AI workloads.
Amazon
Amazon’s e-commerce business is exposed to potential tariff headwinds, with over 60% of sales from third-party merchants sourcing products from China. The company’s advertising unit could be pressured if trade wars worsen.
Apple
Apple generates about three-quarters of its revenue from devices mostly manufactured in Asia. While Apple got a temporary reprieve when tariffs on computers from China were suspended, the company still faces significant uncertainty.
Nvidia
Nvidia’s GPUs are key to AI infrastructure buildouts. While semiconductors have a tariff exemption, AI servers shipped to the U.S. as mostly finished computers are at risk of tariffs. Nvidia plans to produce ‘AI supercomputers’ in Texas and buy chip production services from companies in Arizona.
The uncertainty surrounding tariffs is likely to dominate the earnings calls for these tech giants, with investors seeking clarity on how these companies will navigate the changing trade landscape.
