Big Tech earnings preview, plus the impact of the US-China trade war

About this video

• Video Title: Big Tech earnings preview, plus the impact of the US-China trade war
• Channel: Yahoo Finance
• Speakers: Gil Laura
• Duration: 00:07:09

Overview

This video previews upcoming big tech earnings reports from Microsoft, Alphabet, Meta, Apple, and Amazon, discussing key factors investors are watching, including AI spending, market valuations, the advertising market, and the impact of US-China trade tensions.

Key takeaways

• AI Spending: Major tech companies are investing heavily in AI, but this is driven by customer demand and long-term contracts, not a speculative bubble for these specific companies. However, there are concerns about "bubbleicious" aspects with debt funding capex away from these core companies.
• "Circular Web" of Investments: Investments like Nvidia into OpenAI, which then commits to Nvidia's chips, are seen as an unhealthy behavior, especially when funded by high leverage, though the core companies' investments are considered prudent.
• Ad Market Health: Meta and Google are performing well in the digital ad market, with Meta growing faster. However, the potential for OpenAI to enter the ad market could shift share, primarily impacting Google.
• Apple's iPhone Cycle: The strength of the current iPhone cycle is uncertain and may not be fully understood until after the holiday season. Apple's stock is considered expensive relative to its peers, with lower projected growth even in a strong cycle.
• US-China Trade Tensions: These tensions are largely priced in for companies like Nvidia and Apple, though they add volatility. A slow decoupling from China is ongoing, with companies like Apple and Nvidia moving production out of Asia.