The two forces shaping stock markets are on a collision course. President Donald Trump’s affordability drive threatens to overshadow artificial-intelligence this earnings season.
Trump has been an AI booster, promising to block cumbersome
regulation and increase available energy. But late Monday he fired a warning shot, arguing technology companies must “pay their own way” amid rising electricity prices. Microsoft will be the
first to make “major changes” according to the president—which means Amazon.com, Google-parent Alphabet, and Meta Platforms are unlikely to be far behind.
It’s a threat that was foreseeable. U.S. power demand in 2030 is set to be 25% higher than in 2023 largely due to data centers, according to consulting firm ICF. Most
of that will have to come from the same grid that serves residential needs. Investors will have to wait for more details on Trump’s proposals but it could mean AI companies taking on a chunk of a projected $1 trillion investment by utilities between 2025 and 2029.
In the short term, big tech stocks still look set to be winners. Consensus expectations for the so-called Magnificent Seven group of megacaps are for them to report 20% earnings growth for the fourth quarter of 2025,
compared with an average of 6% for the other 493 members of the S&P 500, according to the BlackRock Investment Institute. Alphabet in particular is on a roll, having just hit a $4 trillion
valuation after striking a deal to power Apple’s Siri digital assistant.
However, the gap between the AI leaders and the rest is set to shrink. For 2026 overall, the Mag Seven are projected to report 19%
earnings growth compared with 15% for the rest of the S&P 500. If tech companies face additional energy costs, that could encourage more rotation into other sectors.
The AI boom has been supported by the White
House’s friendly stance so far. But Trump could quickly turn into a foe for the sector this year.
—Adam Clark
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Alphabet Joins the $4 Trillion Club. It Is Working With Apple.
Google parent Alphabet has officially joined the club of companies with a market value of more than $4 trillion, sitting alongside Nvidia, Apple, and Microsoft. Pushing it higher came after Google formed an AI alliance with Apple in
which the next generation of Apple models will be based on Google’s Gemini.
- Those models will help power future Apple Intelligence features, including a more personalized voice-activated virtual assistant known as Siri. The launch of the new Siri has been delayed until later this year.
- Google’s Gemini has reached more than 650 million monthly users, up from 450 million a few months ago, challenging start-up rivals such as OpenAI and Anthropic. Gemini 3 is considered useful in a wider range of applications, though OpenAI’s chatbot is the most popular.
- Apple has been trying to develop its own AI tools but Siri is seen as falling behind capability-wise versus other chatbots. Expectations for a collaboration between Alphabet and Apple have been growing since reports surfaced last summer.
- Separately Apple took a 20% market share of the global smartphone market last year, according to Counterpoint Research data. That puts Apple in the top spot, just ahead of South Korea’s Samsung Electronics. Apple’s shipments rose 10% in 2025 from the previous year, the highest increase among the top five brands.
What’s Next: Counterpoint expects 2026 global smartphone shipments to shrink 2.1% because of rising memory costs driving up costs for manufacturers. Memory prices are expected to surge 40% to 50% this quarter. They can make up around 10% to 15% of the total cost of materials for a high-end smartphone.
—Angela Palumbo and Adam Clark
Trump Threatens 25% Tariffs on Iran Trading Partners
President Donald Trump has weaponized international trade again. On Monday he said he would impose 25% tariffs on any country doing business with Iran—such as China—as the administration tries to exert pressure on
Tehran after hundreds of protesters have been killed in a two-week uprising.
- Trump’s tariff threat, made over his social-media platform Truth Social, comes a day after the president said Iran was “starting to” cross red lines, noting reports of civilian deaths, and he warned the U.S. was weighing “very strong”
options.
- Trump told reporters over the weekend that a meeting with Tehran was being set up after Iran indicated it was willing to enter discussions over its yearslong nuclear program.
- The U.S. capture of Venezuela’s leader Nicolás Maduro earlier this month is
raising questions about whether the Trump administration will make further bold military moves elsewhere in the world—including in Iran.
What’s Next: While the U.S. could target military or Iranian
Revolutionary Guard Corp. sites, that seems unlikely for now as a move could create major ripples through the Middle East and in energy markets.
—Reshma Kapadia
How the DOJ’s Powell Investigation Could Backfire
The Justice Department’s criminal inquiry into Federal Reserve Chair Jerome Powell drew criticism in the Senate, strengthened Powell’s position, and complicated the transition to his successor. It’s unlikely the
investigation produces a resolution that could force Powell out quickly, plus it casts a shadow over the confirmation of his replacement.
