AI Spends Only Certainty in Silicon Valley Right Now

AHEAD OF THIS quarter's crop of tech earnings, I predicted companies would be reluctant to offer much in the way of forward guidance given the almost Covid-like upheaval of the global economy thanks to President Donald Trump's tariffs.

- Bloomberg

I was half right: There was some guidance—though it arrived with a large asterisk.

"It's hard to tell what's going to happen with tariffs right now," Amazon.com Chief Executive Officer Andy Jassy said on Thursday. "It's hard to tell where they're going to settle and when they're going to settle." His company gave itself characteristically large wiggle room with its operating income projection of $13 billion to $17.5 billion.

Jassy acknowledged that, with the majority of its e-commerce sales handled by third parties, it was difficult to know exactly how tariffs would affect prices on its store. "When you've got 2 million-plus sellers," Jassy said, "they're not all going to take the same strategy if there ends up being higher tariffs. I mean, there are going to be plenty of sellers that decide to pass on those higher costs to end consumers."

Apple, which experienced the biggest stock selloff of the tech giants, estimated revenue growth for the April-June period to be in the "low- to mid-single digit" percentage range compared with last year (analysts were hoping for around 5%). "The colour we're providing assumes that global tariff rates, policies and application remain in effect as of this call," Chief Financial Officer Kevan Parekh said. That's a big assumption if Trump's first 100 days are any guide.