It’s a critical week for the US stock market as four of the Magnificent 7 report earnings in the coming days. Apple and Amazon are due to report numbers on Thursday, 31 July, after Microsoft and Meta post quarterly earnings a day earlier on Wednesday, 30 July. Amid a busy week for earnings for the S&P 500, they come as the market faces a Fed rate decision, a key nonfarm payrolls report and President Trump’s 1 August tariff deadline on Friday.

Tech Earnings Look Ahead

AI spending, cloud demand and digital advertising among the key themes for earnings season for the big tech names that underpin the market’s recent run of all-time highs. Given the concentration in the Mag 7, these numbers are going to be crucial for the market as a whole. The stakes are high – the S&P 500 has notched a run of all-time highs and the four names reporting this week from the Mag 7 account for about a fifth of the market capitalization of the broad market.

Amazon

Amazon reported better than expected earnings and revenues in the first quarter, but offered light guidance for the current quarter. Management noted “tariffs and trade policies” and a number of other factors that could make its guidance subject to change. 

Investors will be hopeful that the Q2 guide will turn out to be a bit conservative. On 1 May, management guided Q2 operating income of between $13 billion and $17.5 billion, a wide range that reflected the uncertainty at the time. There has been a bit more clarity since then, and the estimate is currently around $16.7bn, which would mean growth of 13.8%. The company said it expects sales to be between $159 billion and $164 billion, representing growth of 7% to 11%. The consensus is for $162bn, which would be 9.5% higher YoY. 

Tariff exposure remains a big concern for the retail business and margins in particular. Amazon sources a lot from China and elsewhere globally whilst North America accounts for around 60% of revenues. investors will be watching for growth of 6% in online stories sales. 

Meanwhile the cloud business remains key - AWS revenue grew 17% in Q1, down from 18.9% YoY growth in the prior quarter. For Q2 the estimate is for growth of around the 17% mark again. AWS has been pretty dominant but could be ceding territory to Google and Microsoft.
Amazon recently announced redundancies at AWS and plans further workforce reductions in the coming years. Key question given the competition is whether AWS can sustain a record operating margin of 39.5% given the competition. 

The 2025 AI investment guide will be watched as Amazon has said it’s leaving some cloud growth in the locker as it can’t scale AI compute fast enough. The market liked Alphabet spending an extra $10bn this year on capex. 

Apple

Apple has declined about 13% this year and comes into its fiscal third quarter earnings in a bit of a funk. It’s not really part of the AI narrative in the same way as Amazon or Microsoft and investors are fretting over tariffs, supply chains and China. Apple flagged a $900mn hit to profits in Q2 from tariffs so investors will be eyeing further details on this and what is likely to come going forward. Apple’s AI story has disappointed thus far and this quarterly update is unlikely to produce a fresh catalyst on that front.

Apple is forecast to report earnings per share of $1.42 on revenue of $89.1 billion, which would mean pretty modest growth of 1.4% and 3.9%, respectively. iPhone sales are expected to be about $47 billion for the quarter, almost flat on the same quarter a year before. Apple refrained from giving guidance last time - we’ll be watching to see if there is more clarity ahead and Wall Street anticipates management to forecast EPS $1.65 and revenue of $97.67 billion for its fiscal Q4. 

Microsoft

Azure-eyed investors are dialled into the cloud platform as the key to the investment thesis right now as it sits at the heart of its AI ambitions. MSFT is up around 20% this year and hit a record high coming into earnings week. CFO Amy Hood said on the April earnings call that she expects 34-35% quarterly revenue growth in this quarter from Azure and other cloud services, a slight tick down perhaps from the 35% growth in the last quarter. 

Wall Street is expecting sales and earnings growth of around the 14% mark for the business as a whole, with revenues of $73.8bn and EPS at $3.38 expected.

Meta

Ads are going great but to sustain the ascent Meta needs to make the case for AI returns to drive a multiple expansion. Revenues are expected at $44.8bn on a growth rate of about 14.5% in Q2, which would be the slowest rate of expansion for two years. EPS is seen around $5.87.

Last quarter, Meta raised its full-year capex outlook to between $64 billion and $72 billion, from between $60 billion and $65 billion, as it piled on more data center investments in AI. More recently, CEO Mark Zuckerberg’s multi-billion dollar hiring spree has caught the attention of investors with a number of high profile moves by the likes of Scale AI’s Alexandr Wang and GitHub’s Nat Friedman. Zuckerberg last week said Meta would plough “hundreds of billions of dollars” into AI compute infrastructure.