Big Tech's revenue season is coming to an end, with only Amazon and Nvidia announcing their quarterly performance. Despite uneven coverage by some well-known figures in Silicon Valley so far, AI is still the star of Wall Street programs.
Microsoft (MSFT) missed cloud revenue, Yuan (Meta) said sales growth will slow in the current quarter, Apple (AAPL) did not estimate iPhone revenue estimates, while Google (Goog, GOOGL) was disappointed with cloud growth. President Trump's tariffs on Chinese goods have unveiled a trade-selling battle involving Google and Apple, and the emergence of DeepSeek's low-cost AI model has not helped.
But analysts are not paying too much attention, but focus on Big Tech's long-term AI betting.
"Volatility in the technology sector is likely to continue in the coming months. However, we think the initial large-scale technology results are reassuring and think the AI growth story remains intact," UBS's chief investment office team in a daily update wrote.
Nvidia (NVDA), the leader in AI trade, did not report its earnings until February 26, and missed earnings or prospects could downgrade AI stocks. But for now, it's all about the future of AI.
Microsoft and Meta started earnings last week, with both companies defeating analysts’ expectations at the top and bottom line. However, digging deeper, the beats start to look less impressive. Microsoft reported $40 billion in cloud revenue for the quarter, a damage of $41.1 billion on Wall Street.
The company's intelligence cloud platform, including Azure Services, is also rarely seen, with an estimated $25.8 billion and revenue of $25.5 billion. Microsoft said some of the issues are related to demands that exceed the capabilities of its available cloud services, with non-AI cloud services falling below expectations as it strives to "balance recent growth in non-AI consumption with AI."
Still, AI services grew 157% year-on-year and contributed 13 percentage points to Azure.
Jeffries analyst Brent Thill wrote in a note to investors: "While investors want to get a more obvious 2H (acceleration) from Azure, we continue to believe (Microsoft) is the main one." Software AI winners.”
Microsoft Chief Financial Officer Amy Hood said that by the end of the company's fiscal year 2025, cloud capacity should meet customer needs.
Meta declined to provide full-year guidance for its fiscal 2025, but pointed out growth opportunities through its massive AI investment. The company plans to spend more than $65 billion in AI services this year, including the launch of its next-generation Llama 4 AI model.
Meta also objected to concerns that DeepSeek's low-cost AI poses a danger to its business, which was agreed by Pivotal Research Group's Jeffrey Wlodarczak in its investors' notes after the company's investment report.
“We hope that (Meta) open source Camel AI will mimic the best technology of DeepSeek, which should give Llama a lead in AI, given that its cost may be significantly lower than the cost of its peers, thus allowing first-class AI products to be subject to The fact that substantial enhancement is enhanced. Wlodarczak wrote: "It is our open source and open source." ”
Shares of Google's parent Alphabet plummeted Wednesday after lacking cloud revenue in the last quarter. Like Microsoft, Google blames the demand for its cloud services than is currently available.
Solution? $75 billion was spent on its AI buildings in 2025. That's the $57.9 billion expected by analysts. The hope between analysts and investors is that these billions of dollars will help Google’s supply and demand imbalance.
“We continue to see favorable risks/rewards for letters and believe that as investors gain more comfortable situations related to infrastructure spending, regulatory risks, and the impact of Generative AI on Google Search, over the next few quarters There is a favorable risk/reward,” Wedbush's Scott Devitt wrote in the investor's notes.
Then it was Microsoft and Meta's Apple that beat analysts' expectations for EPS and revenue. But the company failed to meet Wall Street's expectations for iPhone sales, reporting revenue of $69.1 billion, and expected $71 billion.
Apple's Apple Intelligence AI platform could have helped iPhone sales, but the service is only in English, so it's missing in most of its user base, especially in China. The company said it will launch Apple Intelligence in more languages in the coming months.
CEO Tim Cook also said iPhone sales performed better on available Apple intelligence, suggesting that the platform helped drive upgrades, which would be delightful if investors were formed in other regions. .
Now, like other large tech queues, Apple just needs to deliver on its AI promises.
Send an email to Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @Danielhowley.
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