Amazon, Microsoft, and Meta are all scheduled to report their quarterly earnings after the market close on Wednesday, marking the first time these hyperscalers will update Wall Street on capital expenditure plans since the onset of the U.S.-Iran war in February, which has caused supply chain disruptions and a surge in oil prices [1][2][3]. Amazon is expected to report first-quarter earnings per share of $1.64 and revenue of $177.3 billion, with Amazon Web Services (AWS) revenue projected at $36.92 billion and advertising revenue at $16.87 billion [1]. AWS revenue is anticipated to jump roughly 26% year-over-year, and CEO Andy Jassy disclosed that AWS' AI revenue run rate hit $15 billion in Q1, 'ascending rapidly' [1]. Amazon's capital expenditures are projected to reach $200 billion in 2026, significantly above analyst expectations, as the company races to build data centers and infrastructure for AI services [1]. Stifel analysts suggest Amazon's capex budget may rise further due to deepened investments in OpenAI and Anthropic, both of which have committed to using more AWS compute and chips [1].
Microsoft is expected to report adjusted earnings per share of $4.06 and revenue of $81.39 billion, reflecting a 16% increase from the prior year [2]. Despite its worst quarterly stock performance since 2008, Microsoft continues to invest heavily in AI, with analysts predicting $34.9 billion in capital expenditures and assets acquired with finance leases, up 63% year-over-year [2]. CEO Satya Nadella highlighted the 'largest deployment to date' of the 365 Copilot commercial AI add-on, with Accenture purchasing licenses for 740,000 employees [2]. Piper Sandler analysts, who recommend buying Microsoft stock, believe further data on Copilot adoption would be viewed positively by investors [2]. Microsoft, along with its peers, is expected to collectively spend well over $600 billion on capex this year [2]. The company has also seen high-level executive departures during the quarter, including Rajesh Jha and Phil Spencer [2].
Meta is forecasted to report first-quarter earnings per share of $6.79 and revenue of $55.45 billion, with analysts expecting a 31% jump in revenue from $42.3 billion a year earlier, marking the strongest growth since 2021 [3]. Meta's capital expenditures for Q1 are expected at $27.63 billion, with full-year guidance between $115 billion and $135 billion [3]. CEO Mark Zuckerberg has intensified Meta's AI push, investing $14.3 billion in Scale AI and hiring Alexandr Wang to lead Meta Superintelligence Labs [3]. Meta debuted Muse Spark, its first proprietary foundation model, and is expected to lay out clearer monetization strategies [3]. The company is also undergoing significant restructuring, planning to lay off about 10% of its workforce (8,000 employees) and ceasing hiring for 6,000 open roles [3]. Reality Labs, Meta's virtual and augmented reality division, is estimated to post a Q1 operating loss of $4.82 billion on $488.8 million in revenue [3].
The U.S.-Iran war has impacted all three companies, leading to higher energy costs and supply chain disruptions. Amazon responded by introducing a 3.5% fuel surcharge for some third-party sellers [1]. Investors are closely watching how these tech giants manage their massive AI investments and capital expenditures amid these challenges. Analyst opinions are generally constructive, with buy ratings for Amazon and Microsoft, and expectations for continued growth and monetization of AI initiatives [1][2][3].
CONCLUSION
Amazon, Microsoft, and Meta are poised to report robust earnings and record capital expenditures driven by surging demand for AI services, despite facing supply chain disruptions and rising energy costs from the U.S.-Iran conflict. Analysts remain optimistic about the companies' growth prospects and AI monetization strategies, although significant spending and workforce restructuring are ongoing. The market is expected to react strongly as investors assess the sustainability of these tech giants' aggressive investment plans.