Published on the 09/05/2025 | Written by Heather Wright

Tariffs, AI, cloud and antitrust…

It’s AI and cloud versus the US tariffs in the latest round of results from tech giants, with some in celebration mood – albeit for a party that might need to be quick – while others are licking their wounds.

“If some advertisers reduce their spend and prices fall, it creates an opportunity for other advertisers to step in.”

Trillion dollar club members Meta and Microsoft both posted results well above expectations, with Microsoft reporting its best-ever quarterly revenue and profit totals on the back of its Azure cloud business and AI growth.

It saw revenue jump 13 percent year on year to US$70.1 billion, with profits up 18 percent for the January-March quarter. Cloud accounted for $26.8 billion, up 21 percent.

The results, which saw Microsoft reclaim the mantle of the world’s most valuable company from Apple, also saw some easing of concerns over AI investment which saw a backlash earlier this year in the wake of advances by Chinese startup DeepSeek.

Last month Microsoft said it was pausing work on some AI data centres, with Amazon also reportedly re-considering its data centre expansion plans.

The latest financials however hold hope that cloud computing and AI may prove resilient, even in the face of a tariff-induced downturn, and that concerns that the tech giants had been adding too much data centre capacity to support AI, may have been overblown.

Satya Nadella, Microsoft CEO, noted in the company’s earning call that it saw accelerating demand across all industries when it came to cloud migrations.

Meta also exceeded Wall Street expectations to post a 16 percent year on year revenue jump, hitting $42.3 billion in revenue – well ahead of the expected $41.4 billion.

The company is also forecasting strong growth in the second quarter with revenue projections of $42.5 to $45.5 billion – well above analysts expectations.

And Google parent Alphabet also posted stronger than expected revenue growth with revenue of US$90.2 billion (up 12 percent year on year, and ahead of an expected $89.1 billion), with the companies search and advertising businesses showing strong growth, despite AI competition.  The company claims 1.5 billion users a month for its AI Overviews tool, which features at the top of the Google search results page. (Alphabet’s stocks however, tumbled this week after Apple announced its plans to integrate AI search into its Safari browser.)

Apple too, reported financials which bet Wall Street expectations, with revenue of $95.4 billion, up four percent year on year. Analysts had predicted revenue of $94.5 billion.

The company has been trying to calm the market over the tariff concerns.

CEO Tim Cook warned that tariffs are expected to add $900 million to costs for the current quarter and says it’s  ‘very difficult’ to predict beyond June because of uncertainty hanging over tariffs.

Apple has already said it is shifting production of most iPhones to be sold in the US from China to India, with Vietnam to be the major production hub for items like iPads and Apple Watches. It says it’s already using ‘a lot’ of US-made chips in its iPhones.

But while many of the companies reporting figures this month have been reticent to speak too much on the tariffs – Trump’s reaction to Amazon’s suggestion that it might start displaying the cost of the tariffs in their pricing having no doubt concerned many – there’s an undercurrent of anxiety.

Meta, whose digital advertising includes a wealth of Chinese advertisers, noted in its earnings call that it has ‘reflected the change in spend from those Asia-based e-commerce advertisers’ in its revenue guidance. Ad spend from Chinese retailers Temu – which has been Meta’s largest advertiser in recent years – and Shein is reportedly already being cut.

Meta says yes, it loses some revenue if large advertisers reduce spend, which will put a downward pressure on price.

“If some advertisers reduce their spend and prices fall, it creates an opportunity for other advertisers to step in.”

For now, electronics are exempt from the tariffs, though Trump has signalled that’s going to change soon. The threatened higher tariffs have also been largely put on hold for now, with the 10 percent tariff applying for most of the world. The exception, of course is China which remains hit with a 145 percent tariff.

The removal of the de-minimis exemption, which has enabled goods being shipped into the US under the value of $800 to avoid some taxes, has also been rolled back – but not for Chinese goods, adding further threat to ad revenue for the platforms.

It’s a far cry from Trump’s January 20 inauguration, when big tech leaders including Mark Zukerberg, Apple’s Tim Cook, Amazon’s Jeff Bezos, Google’s Sundar Pichai and of course Elon Musk, were seated prominently – and in front of Trump’s own cabinet pics.

The few short months since then have been a seesaw ride for tech, with trillions wiped off the shareholder value of the ‘magnificent seven’ – Alphabet, Apple, Meta, Microsoft, Nvidia, Amazon and Tesla – and that ride looks set to continue.