Tech earnings defy expectations but the future is uncertain

If the recent rash of tech earnings in the US shows anything, it is that no one feels certain of the future.

Microsoft, Meta, Amazon and Apple all reported earnings this week and all managed to beat Wall Street expectations.

But there was also a warning: tariffs and other measures imposed by the Trump administration could pose a significant risk to some of these businesses, putting their meteoric growth in jeopardy.

Take Alphabet. Google‘s parent company showed healthy growth in the revenue for the quarter, seemingly shrugging off the impact of the macro-environment. But behind the rising figures there was another tale, one where Trump’s decision to close a trade loophole exploited by overseas businesses for small shipments could hit Google’s ads business.

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[ Microsoft and Meta both beat Wall St expectations on earningsOpens in new window ]

Those who are exposed to customer demand are more likely to feel the impact of Trump’s whipsawing tariffs policy.

Rising prices are bad news for consumers who will tighten their belts and pause unnecessary spending. That spending is something tech companies have made a decent business out of over the years, although some depend on continued discretionary spending more than others.

The potential for a downturn in their fortunes looms large. Apple, for example, warned tariffs imposed on China by the US could increase its costs by about $900 million in the coming quarter. While Trump may be trying to force a resurgence of manufacturing in the US, it is unlikely to happen before his current term is up. In the meantime consumers will pay the price for more expensive phones and tablets.

When the tech bosses lined up behind Trump at his inauguration they surely couldn’t have foreseen this. A public show of acquiescence, if not quite fealty, should have earned them something more than being used as cannon fodder in Trump’s rollercoaster trade war.

But as anyone who was paying attention the first time he had a shot at the presidency, in a Trump administration you should realise that whatever sacrifice you have made, it will only pay off if it suits the president.