Big Tech Crushes Q1 Earnings on AI and Cloud Surge

Microsoft kicked off Big Tech's Q1 2025 earnings season with blockbuster numbers, reporting $70 billion in revenue, up 13% year-over-year, and net income of $25.8 billion[1][2]. The Intelligent Cloud segment, powered by Azure, generated $26.8 billion in sales with $11.1 billion in operating income, reflecting 33% growth that outpaced expectations[1][2]. Azure's integration with OpenAI drove investor enthusiasm, lifting Microsoft shares 9% in after-hours trading despite plans to spend over $30 billion on AI data centers this quarter[1][3]. Meta Platforms delivered one of its strongest quarters ever, posting $42.3 billion in revenue and earnings per share of $6.43, a 37% jump that crushed estimates of $5.25[1]. The company held firm on profit guidance amid tariff pressures, while hiking its 2025 capital expenditures to $64 billion-$72 billion to fuel AI investments[1]. Shares climbed more than 4% after hours, underscoring Meta's dominance in digital advertising and emerging AI infrastructure[1]. Amazon's results showed resilience with $155.7 billion in sales, up 9%—its slowest growth since the pandemic—and profits soaring 64% to $17.1 billion[1]. AWS, the cloud market leader with 29% share, reported $29.3 billion in Q1 revenue (17% growth) and $11.5 billion in operating income[2]. Amazon issued a cautious Q2 outlook of $159 billion to $164 billion in sales and $13 billion to $17.5 billion in operating income, tempering enthusiasm amid tariff concerns[1]. Apple generated $95.4 billion in revenue, up 5% year-over-year, with earnings per share at $1.65, though China sales dipped 2.3% due to competition and delayed AI features[1]. The company plans to shift most U.S.-bound iPhone production to India starting in June to mitigate tariffs, forecasting a $900 million hit next quarter[1]. Device sales remained a bright spot, bolstering Apple's performance despite geopolitical risks[1]. Cloud computing emerged as the undisputed growth engine, with AWS at 29% market share, Microsoft at 22%, and Google Cloud at 12%[2]. Annual run rates hit $117 billion for AWS, $107 billion for Microsoft, and $49.2 billion for Google Cloud, highlighting surging demand for AI infrastructure[2]. Tariffs and China exposure loomed as risks, but AI momentum positioned leaders like Microsoft and Meta to navigate the challenges[1].