US tech giants set to post monster £82bn profits

US tech giants are bracing for a “monster earnings season” as they continue to cash in on the rise of artificial intelligence.

The ‘magnificent seven’ – Meta, Amazon, Microsoft, Alphabet, Nvidia, Tesla and Apple – are expected to post sales totalling £365bn and profits of £81.9bn.

This is up from £322bn and £64bn respectively over the same period in 2023. The quarterly earnings will be a welcome shot in the arm for Silicon Valley after a hectic few weeks.

Last week, Apple and Nvidia lost billions of pounds amid reports that President Joe Biden is looking to curb sales of chipmaking technology to China and Taiwan.

Microsoft was also in the spotlight after an estimated 8.5 million computers were rendered unusable due to a global computer system outage on Friday.

But analysts have pointed out that companies such as Apple, Microsoft and Nvidia will continue to reap the benefits of AI demand. Dan Ives of Wedbush Securities said he was looking at a “monster earnings season” in which “the AI ​​revolution is just beginning to play out.”

The biggest loser is likely to be electric carmaker Tesla, which has warned of excessive demand.

Although second-quarter delivery figures were better than expected, Matt Britzman, an analyst at Hargreaves Lansdown, said the EV market remains “challenging” as governments weaken incentives.

Earnings season will kick off with updates from Tesla, Alphabet and Microsoft this week.

Meta, Apple and Amazon will report next week, and Nvidia at the end of August.

The period covers the three months to the end of June for all except Nvidia, which covers the period to the end of July.