The biggest tech stocks in the US are gearing up for another earnings season. From AI-driven growth stories to consumer trends and cost control, these companies hold the keys to market sentiment in 2025.
Here, we delve into the key themes and expectations for the so-called ‘Magnificent 7’.
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Meta (Facebook) – 29 January
Meta has set itself apart among tech giants by turning artificial intelligence (AI) investments into quick wins.
Unlike cloud providers that sell AI capabilities, Meta focuses its efforts on enhancing its own products, driving higher ad revenue. It’s also made a smart play to open source its models, allowing it to leverage the global developer community to fine-tune its technology.
That’s not to say the AI push comes cheap.
Zuckerberg sees AI as a once-in-a-generation opportunity, and the spending reflects that ambition. Investment will be watched closely, with some $15bn needed to be spent over the quarter to achieve full-year spending plans.
Investors, who are understandably cautious after Meta’s past overspending on projects like the metaverse, will be laser-focused on investment plans for 2025.
Microsoft – 29 January
AI investment and cloud performance will take centre stage when Microsoft reports its second-quarter results next week.
After spending $20bn in the first quarter, management confirmed plans to sustain this investment throughout the year, bringing the 2025 total to $80bn, with over half allocated to the US.
Rolling out data centres and expanding AI applications is no small feat, and investors will be watching to see if cloud growth justifies the spending.
A key metric to watch is Azure growth, expected at 31-32%. Microsoft has said more recently that its capacity constraints are resolved, so we’d hope to get a better picture of demand in the coming quarters.
Beyond Azure, the rollout of Copilot will also be under scrutiny. Investors are eager to see how product development and adoption are progressing after some criticism from peers.
Tesla – 29 January
Donald Trump’s election win has created a fresh buzz around Tesla, with hopes that deregulation could accelerate the path to full self-driving technology.
Optimism has been tempered more recently as the outlook for fewer interest rate cuts creates a potential headwind. Higher rates challenge affordability in key markets like the US, where the auto and electric vehicles (EV) sectors already face sluggish demand.
Tesla reports first-quarter numbers next week, and while delivery numbers fell slightly short of expectations last year, strong performance in the energy segment should offset the shortfall.
Still, margin concerns loom as Tesla relied on aggressive incentives to boost sales late in the quarter.
Looking ahead, 2025 is pivotal, either solidifying Tesla's promise or exposing shortfalls in the growth story.
The refreshed Model Y was a crucial first step. Next, investors want updates on the affordable model, and tangible progress in full self-driving technology.
The writer holds shares in Tesla
Amazon – 30 January (estimated)
Amazon ended the third quarter on a high note last November, setting an upbeat tone heading into its fourth-quarter results.
As usual, AWS will be the cloud hanging over market sentiment – any growth materially above 19% should get a warm reception.
Investors will also be tuned in for updates on AWS’s AI initiatives and the eye-popping investment Amazon plans to spend in the space.
Meanwhile, let’s not forget Amazon’s trusty old e-commerce arm, often overshadowed by its cloud cousin. For the first time in a while, it’s showing signs of life, with fresh initiatives like the discount storefront ‘Amazon Haul’ helping expand its reach. If Amazon can fine-tune automation, there’s potential for some tasty margin expansion too.
Apple – 30 January
All eyes will be on Apple's iPhone sales in next week’s first-quarter results. This period not only captures the crucial holiday season but also marks the first full quarter of iPhone 16 sales, bolstered by the rollout of Apple’s new AI features.
Company guidance suggests low-to-mid single-digit revenue growth, but reaching the higher end of that range could prove challenging, with analysts forecasting growth of around 4%.
Reports of a tough period for phone sales in late 2024 add to concerns, raising the potential for underwhelming iPhone performance.
While Apple’s new AI-driven features hold promise, the slow rollout, mixed early reception, and strong Chinese competition present some risk to the narrative that a major upgrade cycle is underway.
Alphabet (Google) – 4 February
Having arrived fashionably late to the AI party, Alphabet is now making a splash.
AI-powered overviews in Google search are starting to show their value. Investors will be laser-focused on ad revenue, which is still the core growth driver – a 9.5% uplift is expected from next week’s fourth-quarter results.
Despite the cloud business stealing some headlines, search remains Alphabet’s crown jewel. Google is still the best search brand on the planet, the key is nailing AI integration to keep the dollars flowing and the dominance intact.
Meanwhile, Alphabet’s cloud business impressed with 35% growth last quarter, outpacing Amazon and Microsoft – though from a smaller base.
Elevated investment is expected to continue, but efficiency gains have so far kept profits buoyant. Sustaining this balancing act will be a critical storyline next week.
NVIDIA – 26 February
NVIDIA wraps up earnings season for the Magnificent 7 with results due in late February, and all eyes will be on AI chip demand.
Recent signals, including Microsoft’s pledge to keep AI investments high, suggest NVIDIA’s cutting-edge chips remain in hot demand. With AI central to its growth story, the rollout of its latest Blackwell chips will take centre stage where supply constraints held things back a touch in the quarter before.
Expected revenue growth of 72% highlights NVIDIA’s impressive momentum, but margins will also be under the spotlight. Costs tied to Blackwell’s ramp-up could put some pressure on gross margins, with any dip below the guided 73.5% mark likely to sway sentiment.
We’ll also be keen to hear more about NVIDIA’s push into robotics and self-driving, where CEO Jensen Huang sees a multi-trillion-dollar market emerging.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Investments rise and fall in value so investors could make a loss.
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