Focus of US Tech Giant Earnings Reports: Apple's execution, Microsoft's computing power, Meta's investment, Tesla's imagination
As the VIX index hovers around 16, the market holds its breath for tech giants’ earnings season. The trading logic for this round of earnings is extremely clear: rather than focusing on EPS over the past three months, watch for guidance on capital expenditures (Capex) and how much the growth story is delivered.
For investors, the most direct risk is the mismatch between narrative and cash flow: Meta faces serious risks of uncontrolled capital expenditures—should guidance exceed expectations, valuation will come under heavy pressure; Microsoft, meanwhile, sits at the sweet spot of the “computing power arms race,” with Goldman Sachs predicting Azure’s growth rate will bounce back above 40%, making any pullback a buying opportunity.
Apple will once again demonstrate its iron-fisted control over the supply chain, with JPMorgan noting that even during a cycle of rising storage costs, Apple can maintain its profit margin and exceed expectations with the iPhone 17 cycle; meanwhile, Tesla’s fundamentals have moved beyond making cars, evolving into a game centered on Musk’s business empire (SpaceX IPO) and the Robotaxi timetable.
Tesla: Electric Vehicles Are Just a Cover—Shareholders Want a Ticket to SpaceX
On the eve of the earnings release, Tesla shareholders’ focus has fundamentally shifted. The top question retail investors posed on Say.com was direct: “You once said: Loyalty should be rewarded with loyalty. If SpaceX does an IPO, will longtime Tesla shareholders get priority?”
This anxiety stems from inverted valuations and weakness in core business. SpaceX is seeking a $1.5 trillion valuation—almost twice Tesla’s current $800 billion market cap. By comparison, Tesla’s own car-making business has disappointed: In 2025, only 20,237 Cybertrucks were sold, a 48% plunge from the previous year.
Investors are essentially asking Musk to pay a “loyalty premium.” While Musk has verbally expressed hope to look after Tesla shareholders, the actual pathway—such as a “directed share program”—remains unclear.
Besides the lure of SpaceX, the rest of Tesla’s story is powered purely by “imagination.”
Management needs to answer questions in the earnings call about the specific bottlenecks for Robotaxi, and when so-called “supervised-free” FSD (Full Self-Driving) will truly materialize. Although Musk claims autonomous driving is a “solved problem” and predicts it will be widely used by year end, the market wants to see a timetable for Robotaxi expansion beyond Austin and the San Francisco Bay. As for the humanoid robot Optimus, even though Musk promises sales starting by the end of 2027, the “non-existent supply chain” reality makes this commitment highly uncertain.
Meta: A Gamble—Capex May Exceed $110 Billion By 2026
BofA analyst Justin Post made it clear in his preview report: This quarter’s focus for Meta isn’t whether Q4 results will beat expectations (which it probably will, with expected $59.2 billion revenue), but what management’s guidance will be for 2026 costs—the sword of Damocles hanging overhead.
The data is jaw-dropping. BoA predicts Meta’s total 2026 expenses will surge to $153-160 billion, a year-on-year increase of 30-36%. Even more staggering is Capex, estimated at $109-114 billion. This frenzied investment is mainly for infrastructure, including electricity deals with nuclear power firms and the newly established “Meta Compute” team.
Although Reality Labs laid off about 10% (1,000-1,500 people) as a sign of metaverse/VR business contraction, these savings are far from filling AI’s spending gap.
BoA believes, as long as Meta can prove its costly GPUs and data centers drive growth in its core ad business (like AI-powered targeting), the market will accept it. Furthermore, the next-gen LLM model, codenamed “Avocado,” is expected to launch in spring 2026—key for verifying whether these huge investments pay off.
Microsoft: The Last Line of Defense for Bulls Is Azure’s Growth Back to 40%
Microsoft shares have dropped 13% since Q1 earnings, underperforming the Nasdaq. Goldman analyst Gabriela Borges believes concerns about the OpenAI ecosystem and Azure’s competitive position are overblown.
Goldman’s core view: Azure’s growth is rebounding. Analysts expect Q2 Azure revenue growth (constant currency) to reach 39%, with a path toward 40%-45% over the next four quarters. As for concerns about huge Capex, Goldman’s calculations show Microsoft’s investment efficiency isn’t low—from FY25 Q4 to FY27 Q4, Azure revenue per gigawatt (GW) will roughly double.
Goldman’s field research shows that corporate IT budgets are more relaxed than a year ago and Copilot adoption is rising. Though there are promotional discounts, customers are moving from pilots to full deployment.
Microsoft isn’t blindly burning cash; its GPU allocation is highly strategic: prioritizing first-party apps like Copilot (with better unit economics) and internal R&D. For this quarter’s results: as long as Azure growth can hold at ~39% and next quarter’s guidance remains in the 38%-40% range, market sentiment will recover.
Apple: The Execution Machine Ignoring Cost Pressures
While the market worries rising memory chip costs could erode hardware margins, JP Morgan analyst Samik Chatterjee offers a sharply different view: Apple’s scale can absorb these costs.
JPMorgan sharply raised Apple’s target price to $315. The core logic is iPhone 17’s strong demand. Analysts forecast F1Q (December quarter) iPhone revenue will hit $80.2 billion, up 6% YoY, far above the market’s implied 13% growth expectation. This better-than-expected hardware revenue, combined with a strong 47.6% gross margin, will mask noise in the services business.
Although App Store revenue growth may slow to ~7%, that’s just one part of services. Apple has enough levers (such as iCloud and AppleCare) to keep overall services revenue growth at a high 14%.
More importantly, the market is awaiting the arrival of the iPhone 18 cycle (including foldable models); current strong execution is just paving the way for the next super cycle. Additionally, since Gemini model’s AI access costs have not yet hit F1Q on a large scale, operating expenses (Opex) for the quarter are expected to be below guidance, providing further upside surprise for EPS.
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