The fortunes of Big Tech are diverging sharply amid a volatile global business environment, with artificial intelligence driving gains for enterprise-focused giants like Microsoft and Google-parent Alphabet, even as consumer tech firms struggle under the weight of U.S. tariffs and tightening household budgets. Both companies posted strong March quarter results, attributing their growth to booming AI demand, which helped offset the fallout from President Donald Trump’s escalating global trade war.
In contrast, companies heavily reliant on consumer electronics, including Qualcomm, Samsung Electronics, and Intel, offered bleak forecasts, blaming economic uncertainty and weakening consumer demand for their woes. The divide has raised concerns for firms like Apple and Amazon, whose reliance on China for production and sales makes them especially vulnerable to tariff impacts. Apple, which generates nearly half its revenue from iPhones, may shift production to India, while Amazon’s retail operations could take a hit as Chinese merchants pull back from major sales events.
While the Trump administration has so far spared most electronics from tariffs, industry players remain on edge as Washington hints at further levies. Analysts warn that Apple and Amazon, both scheduled to report earnings shortly, may find it harder to shield themselves from trade disruptions, unlike Microsoft and Google whose enterprise-heavy models have provided insulation. Facebook-parent Meta also reported strong ad sales, but smaller rivals like Snap voiced caution amid a tightening ad market.
Microsoft reported a 33% revenue jump in its Azure cloud segment, driven by AI demand, while Alphabet also saw gains from AI integration in search ads. The AI-driven momentum lifted shares of Microsoft and Meta, while chipmakers like Qualcomm fell on weak guidance. Microsoft CFO Amy Hood noted that the tech giant remains supply-constrained but encouraged by AI’s growing contribution to Azure’s growth, which rose to 16 percentage points in Q1. Analysts say the results confirm strong AI infrastructure demand, despite earlier fears of overcapacity.