CNBCยท2025-07-22 18:55Core Viewpoint - The upcoming earnings reports from major tech companies like Alphabet, Tesla, Meta, Microsoft, and Apple are crucial for determining the sustainability of the recent stock market rally, particularly in the context of ongoing tariff concerns and AI investments. Group 1: Market Performance and Earnings Outlook - The Nasdaq has reached a record high, marking an 8% increase for the year after a challenging first quarter [3] - Earnings announcements from major tech companies are expected to influence market sentiment over the next 10 days [3] - Alphabet's revenue growth is projected at 11%, the slowest in two years, while Meta's expected growth is 14.5%, the slowest since mid-2023 [9][22] Group 2: Alphabet's Challenges and AI Focus - Alphabet's online ad business has been impacted by concerns over tariffs, with trade policies expected to create a "slight headwind" for ad revenue [8][9] - Analysts suggest that Alphabet's search business is undergoing a multi-year transformation, with potential improvements in return on ad spend (ROAS) due to AI advancements [10][11] - The company plans to invest $75 billion to enhance its AI and cloud infrastructure [12] Group 3: Tesla's Struggles and Future Plans - Tesla's stock has declined by approximately 17% this year, with a 14% year-over-year drop in second-quarter deliveries [14][15] - The company faces increasing competition from cheaper EV alternatives and is under pressure to revitalize its sales [15][17] - Tesla's robotaxi efforts are being closely monitored, although analysts view their financial impact as minimal [18] Group 4: Meta's AI Investments - Meta has significantly increased its investment in AI, including hiring key talent and planning to invest "hundreds of billions of dollars" in AI infrastructure [19][20] - The company raised its full-year capital expenditures outlook to between $64 billion and $72 billion, reflecting increased data center investments [20] - Analysts express that while Meta's AI initiatives are promising, the path to platform leadership remains competitive [21] Group 5: Microsoft and Cloud Services - Microsoft continues to focus on Azure, which is critical for its AI ambitions, with expectations of 34% to 35% quarterly revenue growth from cloud services [25] - The company has made cost-cutting measures, including layoffs, and is expected to provide fresh spending guidance for the fiscal year [26][27] Group 6: Apple and Tariff Impacts - Apple has faced challenges due to tariffs, with shares down about 15% this year, and is seeking clarity on its future strategy [29] - Revenue growth is expected to be around 4%, consistent with recent performance, while the company anticipates additional costs due to tariffs [30] - Apple is investing in U.S. manufacturing, including a $500 million deal to enhance rare earth materials production [31] Group 7: Amazon's Performance and Cloud Growth - Amazon's upcoming results will shed light on how it is managing tariff uncertainties, with previous forecasts indicating weaker-than-expected operating profit [32] - The company's cloud growth has slowed, with AWS revenue growth at 17% in the first quarter, the slowest in a year [34] - Amazon's CEO indicated that data center capacity constraints are affecting cloud business growth, although some relief is expected later in the year [34]