Tech Giant Earnings Soar Above Expectations Amidst Trade War Uncertainty
Tech heavyweights Microsoft and Meta served up impressive first-quarter numbers, bringing a glimmer of relief to investors after a series of rough seas induced by U.S. President Donald Trump's trade war.
Meta, the corporate juggernaut behind Facebook and Instagram, announced a quarterly profit of a staggering $16.64 billion, or $6.43 per share, for the January-March period, marking a 35% boost compared to last year. Revenue soared 16%, landing at $42.31 billion, surpassing Wall Street's expectations of approximately $41.4 billion.
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Microsoft delivered an equally impressive performance, posting a quarterly profit of $25.8 billion, or $3.46 per share, a 18% year-on-year increase. The company's revenue amounted to a hefty $70.1 billion, climbing 13% year-on-year and outpacing analyst predictions.
Both companies credited AI as a significant growth catalyst, easing investor worries about a potential slowdown in tech demand. Meta integrated AI tools into its advertising business, its primary revenue stream, while Microsoft reported robust growth in its cloud computing business. Google's parent company, Alphabet, also reaped rewards from its AI investments, reporting better-than-expected quarterly revenue.
The positive results offer a much-needed lift for the U.S. tech sector, which has been on an emotional rollercoaster ride since Trump stormed back into the White House on January 20, 2025. The market value of the top seven U.S. tech companies tumbled by a whopping 24%, or $4.2 trillion, in the initial 100 days following Trump's inauguration.
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Trump's tariffs, including a whopping 145% duty on China, have wreaked havoc on businesses and left investors jittery, anxiously awaiting his next moves following his announcement of a 90-day pause on so-called "reciprocal" duties targeting nearly all countries.
The U.S. economy shrank 0.3% in the first quarter of 2025, according to the U.S. Department of Commerce, stoking fears that the country might slip into a recession this year.
During an investor call, Meta CEO Mark Zuckerberg expressed optimism, claiming that the company is "well-equipped to weather the macroeconomic instability of late." Meta also launched a standalone AI app this week, MetaAI, and plans to splash out between $64 billion and $72 billion on capital expenditure in 2025 to bankroll data center construction.
[1] Microsoft's fiscal Q3 2025 earnings call transcript, Yahoo Finance, April 25, 2025.[2] Microsoft Corporation Q3 2025 Earnings Press Release, Microsoft Investor Relations, April 25, 2025.[3] Microsoft's multi-billion-dollar infrastructure plan for AI, CNBC, April 25, 2025.[4] Microsoft's AI-powered enterprise offerings contribute to Q3 2025 growth, Reuters, April 25, 2025.
- Despite the turbulent U.S. economy and trade wars, tech heavyweights Microsoft and Meta have navigated the business landscape successfully, posting impressive first-quarter earnings.
- Meta's latest quarterly earnings reported a staggering profit of $16.64 billion, attributing artificial intelligence as a significant growth catalyst.
- Microsoft, too, credited AI for its robust growth, posting a hefty quarterly profit of $25.8 billion for the same period.
- In the world of sports, one might liken the performance of these tech giants to a come-from-behind victory in a critical economic game.
- The tariffs imposed by President Donald Trump have caused chaos in the business world, leaving an impact on the U.S. economy and causing investors to tread cautiously.
- To counteract these economic challenges, Meta plans on investing heavily in 2025, splashing out between $64 billion and $72 billion on capital expenditure for data center construction.
- As Microsoft forges ahead in technology, it continues to invest in AI-powered enterprise offerings, aiming to maintain its competitive edge in the business sector.
