Introduction
The first quarter of 2025 has seen a unique blend of intense technological innovation and geopolitical turbulence, with the “Seven Majestics”—excluding NVIDIA—reporting their results amidst trade uncertainties imposed by President Donald Trump.
Overview of Tech Giants’ Performance
Despite the challenging environment, most of these tech giants have shown operational strength. However, the looming costs and threats to global trade are starting to cast shadows over their outlook.
Apple
Apple managed to partially navigate the adverse conditions, with total revenues reaching $90.753 billion—a 4.3% year-over-year decrease. However, iPhone revenues grew by 1.9%, totaling $46.841 billion, marking its primary income source.
CEO Tim Cook highlighted the resilience of this segment, acknowledging that trade tariffs are causing distortions in their supply chain. The company anticipates margin pressures if trade tensions persist through the second half of the year.
Amazon
Amazon maintained its momentum, reporting revenues of $155.667 billion—a 9% year-over-year growth, along with operating income of $18.405 billion—a 20% increase compared to the same quarter last year.
Part of Amazon’s success can be attributed to advancing inventory purchases to mitigate tariff effects, though this also impacted their profitability. CEO Andy Jassy warned that if trade tensions continue, some costs might be passed on to consumers.
Meta (formerly Facebook)
Meta’s revenues grew by 16% year-over-year, reaching $36.455 billion, with a net income of $16.644 billion—a 35% increase.
Despite this success, Meta raised its capital expenditure projection for 2025 to a range of $35,000 to $40,000 million due to increased infrastructure costs. Nevertheless, the company continues prioritizing aggressive investments in artificial intelligence, even if it means short-term margin pressures.
Microsoft
Microsoft surpassed expectations, reporting revenues of $70.050 billion—a 13% year-over-year growth, with a 16% increase in operating income totaling $32.000 billion.
Azure’s 31% growth solidified its position as the primary expansion driver. The company confirmed it is accelerating data center investments, though some hardware faces logistical and tariff restrictions.
Alphabet (Google)
Alphabet presented a solid quarter with revenues of $90.234 billion—a 12% year-over-year growth, and a 20% increase in operating income totaling $30.606 billion.
Google Cloud’s 28% growth was noteworthy, and the company anticipated that some infrastructure investments might be pressured by tariffs on critical equipment, especially in data centers.
CEO Sundar Pichai was cautious about direct impacts but emphasized operational efficiency as crucial for the year.
Tesla
Tesla was the outlier, with revenues of $19.335 billion—a 9% year-over-year decrease, driven by a 20% drop in automobile sales.
Operating income fell by 66% to $399 million, with margins squeezed by higher costs and discounts.
CEO Elon Musk highlighted growth in the Energy (+67%) and Services (+15%) divisions, anticipating a recovery in deliveries for the second half of the year. However, he warned that key input tariffs might limit their global competitiveness.
Trade Uncertainty and Tech Giants’ Response
Trump’s trade policies, including a 10% tariff on most trading partners and up to 145% on Chinese imports, have created a new uncertainty front for the tech sector.
While some countries, like the UK, have started to reach tariff-relief agreements, others, such as China, remain in a climate of uncertainty marked by potential tariff impositions, adjustments, or eliminations.
Although most tech giants have started redesigning supply chains, advancing purchases, or even relocating operations, their room for maneuver is limited. Innovation alone cannot offset the operational risks posed by a volatile political environment.
For now, the Majestics remain standing, albeit with reduced margins and increased caution.
Key Questions and Answers
- What are the “Seven Majestics”? The “Seven Majestics” refers to the seven leading technology companies: Apple, Microsoft, Amazon, Alphabet (Google), Meta (Facebook), NVIDIA, and Tesla.
- How have these companies performed amidst trade uncertainties? Despite the challenging environment, most tech giants have shown operational strength. However, trade tariffs imposed by President Trump have introduced new uncertainties and margin pressures.
- What strategies have these companies adopted to cope with tariffs? Several tech giants have begun redesigning supply chains, advancing purchases, or relocating operations. However, their room for maneuver is limited due to the volatile political environment.
- What are the potential long-term impacts of these tariffs on the tech sector? The long-term effects may include increased costs, reduced competitiveness, and potential shifts in market dynamics as companies adapt to the new trade landscape.
