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This is going to be a fun week. First, Elon Musk and Sam Altman square off in a California court over the origins of OpenAI (for more details, see here). The final outcome probably won’t have a huge impact on the ChatGPT company—Musk’s chances of both winning the case and getting everything he wants from a victory seem unlikely, as we wrote here. No matter what happens, though, the courtroom antics should be entertaining. (Musk still has a chance of winning, to be clear).
And then on Wednesday, four of the biggest tech firms—Google, Meta Platforms, Microsoft and Amazon—are releasing their March quarter numbers after the market closes, likely within a few minutes of each other. (Coincidence, or conspiracy to bamboozle hapless reporters and analysts?) Apple follows on Thursday with its March quarter numbers.
Analysts expect Apple will deliver 15% revenue growth—similar to the previous quarter and a huge improvement on the single-digit growth (or declining) numbers we’ve been used to seeing from Apple in recent years. That will give retiring CEO Tim Cook one more chance to throw the word “record” around.
But it's the Wednesday reports that are most important. The four companies reporting are spending a combined $600 billion-plus on capex this year, much of that to expand AI-related data center capacity, so the simultaneous reports will offer a valuable report card on the state of play.
That’s more true of the three big cloud firms—Amazon Web Services, Microsoft Azure and Google Cloud—which are renting out their servers for use by one or both of the major AI firms, OpenAI and Anthropic, along with a growing number of other businesses. In the fourth quarter, Google Cloud and Amazon Web both reported accelerating growth while Microsoft Azure reported a slight slowdown on a still-hot growth rate of 39%, due to a lack of computing capacity. That ensures all eyes will be on Azure’s growth rate this week.
But it’s not just about cloud growth. Investors have zeroed in on how Microsoft’s software business will fare in an AI-dominated world, putting the spotlight on the so-far relatively small number of subscriptions to its Copilot AI chatbot. Microsoft has revamped its Copilot teams so an update on Copilot subscriptions is highly anticipated.
Then there’s the advertising market, dominated by Google and Meta. Both tech giants have deployed AI to boost their ad businesses, although Meta seems to be outdoing its bigger rival. Analysts seem to be anticipating more of the same: Meta is expected to post its strongest growth rate since late 2021. Alphabet’s growth rate is also expected to be higher than in recent quarters, although to a less notable degree.
The bottom line is that a blizzard of numbers will arrive on Wednesday afternoon. Digging through the deluge will take a bit of time but it will be worth the effort.
Here’s what analysts are expecting for the topline and EPS of the five big tech firms reporting this week, courtesy of S&P Global Market Intelligence:
Amazon (Wednesday)
First quarter revenue: $177. 17 billion +13.8%
EPS $1.65 +1.9%
Alphabet (Wednesday):
Revenue: $106.9 billion +18.5%
EPS: $2.62 -7.7%
Meta Platforms (Wednesday)
Revenue: $55.56 billion +31%
EPS $6.64 +0.8%
Microsoft (Wednesday)
Fiscal third quarter revenue: $81.399 billion +16%
EPS $4.05 +16.7%
Apple (Thursday)
Fiscal second quarter revenue: $109.689 billion +15%
EPS: $1.95 +18%
In Other News
• Nvidia shares closed at an all time high of $208.27 on Friday, giving the company a market capitalization of $5.06 trillion.
• Google has agreed to make an additional investment in Anthropic of up to $40 billion, deepening a multipronged relationship that also includes a major expansion of Anthropic’s access to AI servers. The search engine company, an early backer of Anthropic, will initially invest $10 billion in at a $350 billion valuation.
• Intel shares jumped 25% on Friday in the wake of the company’s first quarter earnings report, which showed the all-important data center and AI revenue rising 22%, lifting overall revenue 7%.
• The Canadian AI lab Cohere will acquire the German AI lab Aleph Alpha for an undisclosed price, the companies said Friday. Schwarz Group, the German investment firm that is one of Aleph Alpha’s biggest backers, will also invest $600 million in Cohere’s upcoming Series E funding round, the companies said.
• The Chinese government is planning to restrict tech firms from receiving funding from the U.S. without prior approval, as part of Beijing’s response to Meta’s acquisition of AI agent startup Manus, Bloomberg reported.
• Meta Platforms and Amazon announced a deal on Friday for Meta to use Amazon’s Graviton chips. The deal, which a spokesperson said will total several billion dollars over multiple years, comes as Meta has been spending heavily on chips and cloud storage as it tries to turn itself into an AI powerhouse.
• Related Digital and Blackstone finalized financing for a $16 billion data center campus in Michigan being built for Oracle, the latest in a series of projects planned for Oracle to rent computing capacity to OpenAI.
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