Six of the outstanding seven reported their financial results during this earnings season, which gave investors some much-needed insights on how tariffs on the world’s largest tech companies affected.
Tesla, Letters, Metaplatforms, Microsoft, Amazon.com and Apple have all reported earnings over the past two weeks, making Nvidia the only remaining Mag Seven company.
Entering earnings season, tariffs raised by the Trump administration raised concerns that companies will increase prices to offset taxes, resulting in a pullback in consumer and business spending and could be a potential recession.
So far, the result is just telling Wall Street that technology is “as confused as everyone else,” Steve Sosnick, chief strategist at interactive brokers, told Barron's.
“Most of them have a hard time deciphering how tariffs will affect them, partly because it's a moving target,” he added. “They don't necessarily know how everything will end.”
Apple has the clearest insight into how it is affected. CEO Tim Cook said on Thursday's revenue call that the company is expected to take $900 million hit rate Tariffs from June quarter.
Meanwhile, another consumer-oriented brand, Amazon, says yes Closely monitor the effectiveness of tariffswhen “doing everything possible to keep the price low in a way that makes economic sense”. ”
Tesla Keep the guidance for the second quarter As companies measure the impact of “transferring global trade policies on automotive and energy supply chains.”
The rest of MAG Seven is mostly quiet on this topic, with letters, meta and Microsoft providing guidance beyond expectations and mentioning macro uncertainty.
However, there is a trend – slowing ad spending. Alphabet and Meta have begun to see Asian advertisers return their budgets since the Trump administration removed the De Minimis waiver. This exemption previously allowed low-cost imports to enter the United States without tariffs.
Chinese companies Shein and Temu (known for their cheaper items), don't want to put them in ads if they stop spending due to rising prices.
But despite the current doubts in advertising power, software remains a paradise for tech investors. Businesses are still spending In artificial intelligence powered software, it aims to reduce costs and increase productivity.
“It's obvious that tariffs can be applied on real-world goods. But when it comes to services – many of these large software companies are developing more to software as a service – they have a poor impact on tariffs.”
In most cases, investors can comfort tech companies to maintain a solid stance. However, as trade policies continue to develop, it is clear that uncertainty will always exist.
