Despite beating analyst expectations on both revenue and earnings, Alphabet’s first-quarter filing revealed warning signs for its core search business. Melius Research notes that paid clicks growth decelerated to just 2% from 5% a year earlier as AI-generated summaries began to cannibalize traditional search monetization—an ominous signal that click growth could quickly turn negative under mounting AI and demographic pressures.
Wedbush forecasts that major tech giants—including Microsoft (MSFT), Amazon (AMZN), Meta (META) and Apple (AAPL)—will report solid first-quarter results, buoyed by continued investments in artificial intelligence despite tariff-driven uncertainty. With AI now commanding roughly 15% of IT budgets and remaining the top priority for executives, other capital expenditures appear set to yield, underscoring Big Tech’s resilience in a choppy trade environment.
Market Overview:- Alphabet’s paid clicks growth slows to 2%, raising long-term search monetization concerns.
- Microsoft, Amazon, Meta and Apple expected to post robust Q1 earnings amid AI capex.
- Bitcoin up 0.5% on hopes of easing geopolitical tensions and new acquisition vehicle news.
- SoftBank, Tether and Cantor Fitzgerald’s bitcoin vehicle could boost crypto demand.
- Citi analysts say Apple’s supply chain tariffs largely priced in, with rebound potential if exempted.
- Supply chain shifts to India and Vietnam mitigate U.S. tariff impacts on iPhone shipments.
- Investors eye megacap earnings and Fed commentary for signs of macro stability.
- Crypto gains may reverse if peace talks stall or inflation data surprises.
- Apple supply chain stocks could rebound on tariff exemptions or production shifts.
- IBM’s $150 billion U.S. investment-especially the $30 billion+ earmarked for quantum and mainframe manufacturing-positions the company as a leader in next-generation computing, supporting domestic tech jobs and reinforcing national security.
- This move aligns IBM with Nvidia and Apple’s massive U.S. commitments, signaling Big Tech’s willingness to partner with policymakers and potentially benefit from favorable regulatory or procurement treatment as tariffs reshape global supply chains.
- IBM’s robust cash position and ongoing capex demonstrate its capacity to execute on large-scale innovation, while its focus on quantum and AI could unlock new commercial and defense applications, driving long-term growth.
- The investment underscores IBM’s role as a key government contractor and industry frontrunner, potentially attracting new partnerships and reinforcing its competitive moat amid a global quantum “arms race.”
- Broader sector resilience is evident as Alphabet, Microsoft, Meta, and Amazon all post strong earnings and double down on AI and infrastructure, suggesting Big Tech can weather tariff headwinds and maintain robust capital deployment.
- Apple’s supply chain diversification to India and Vietnam, and potential tariff relief, could restore earnings visibility and spark a rebound in supplier stocks, while the company’s own $500 billion U.S. investment signals confidence in domestic growth.
- Bitcoin’s rally to all-time highs reflects renewed institutional interest and risk appetite, offering a positive macro signal for tech and innovation-driven sectors if geopolitical and inflation risks stabilize.
- IBM’s (IBM) $150 billion headline figure may be more about political optics than operational impact, serving as a shield against trade conflict rather than a clear, actionable investment plan.
- Quantum computing’s real-world applications remain years away, raising questions about near-term ROI and the risk of overcommitting capital to unproven technologies.
- IBM’s recent loss of government contracts and revenue headwinds highlight ongoing operational challenges that could undermine the effectiveness of new investments.
- Execution risk is significant: scaling advanced manufacturing could encounter technical, supply chain, or talent hurdles, especially as other tech giants also ramp up U.S. spending.
- Alphabet’s slowing paid clicks growth and the risk of AI cannibalizing core search revenue signal longer-term monetization challenges, while legal and tariff headwinds add uncertainty.
- Tariffs and supply chain disruptions have already triggered historic selloffs in Apple and Amazon shares, and further escalation could compress margins, dampen demand, and delay recovery across the sector.
- Bitcoin’s (GBTC) rally may be fleeting if peace talks stall or inflation surprises, and crypto volatility could quickly reverse, removing a key risk-on signal for tech equities.
Bitcoin’s recent rally to $94,763 reflects a fleeting boost in risk appetite amid hints of de-escalated conflicts and high-profile institutional interest in crypto, though analysts caution that the gains are vulnerable to geopolitical or inflation-driven reversals.
Citi’s(C) research suggests that U.S. tariffs on Chinese suppliers have already been absorbed by the market, with iOS devices increasingly sourced from India and Vietnam. Should Apple secure tariff relief—either through supply-chain diversification or regulatory carve-outs—related suppliers with strong earnings visibility stand to benefit most.
