Oceans absorb 90% of the heat from climate change — here’s why record ocean temps are so harmful

Published

2 years ago

August 16, 2023

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This picture of the Pacific Ocean was taken by the International Space Station orbits into in April 2022 from 261 miles up.

Photo courtesy NASA

The oceans of the world absorb the overwhelming majority of the heat caused by global warming, creating serious consequences for life in and around them, including humans.

“The oceans do a lot of the work in reducing the level of warming,” Baylor Fox-Kemper, professor of earth, environmental, and planetary sciences at Brown University, told CNBC. “Over 90 percent of the excess energy on earth due to climate change is found in warmer oceans, some of it in surface oceans and some at depth.”

The oceans cover 70% of the earth’s surface, and water can absorb tremendous amounts of energy.

“Water has a huge heat capacity, which means that it takes a lot of energy to change the temperature of water,” Carlos E. Del Castillo, head of NASA’s Ocean Ecology Laboratory, told CNBC. “Do the mental experiment. Put two pots on a stove. One with water, one without. Both on high. Wait one minute. If you touch the water, you will barely feel a difference in temperature. If you touch the metal of the empty pot you will burn. This is because the heat capacity of water is way higher that that of a metal.” Castillo admitted the science is a bit more complicated that this mental thought exercise, but it helps visualize the idea of heat capacity.

That shows “why a small change in temperature in the ocean” means the oceans have been absorbing massive quantities of heat, Castillo said.

Record temperatures of 101 degrees in the ocean off the coast of Florida is one more example of the increasingly obvious effects of climate change. NASA on Monday said July was the warmest month in its record books dating back to 1880.

“The warmer ocean that we are seeing now represents a ratcheting up of the climate change signal,” Benjamin Kirtman, professor of atmospheric sciences at the University of Miami, told CNBC. “This is consistent with a continued increase in extreme weather in the climate system, that is more heat waves and marine heat waves, droughts in already dry regions, floods in already wet areas, extreme winds, and fire.”

The more greenhouse gasses we emit, the hotter the oceans will get.

“Greenhouse gas warm the entire climate system including the ocean. Put simply, the greenhouse gases serve to trap more heat, some of which is absorbed by the ocean,” Kirtman told CNBC. “So, as greenhouse gas concentrations increase, we expect the ocean to absorb more heat and warm.”

By the numbers: Record highs and big-picture trends

Daily global sea surface temperature in degrees Celsius for the ocean waters between latitude 60 degrees to the South and 60 degrees to the North, with a line for each year starting in January 1979 to July 2023. The years 2023 and 2016 are shown with thick lines. The other years are color coded by decade, with the 1970s in blue and the 2020s in brick red. The chart was made by and is shared with the courtesy of Copernicus, the the Earth observation component of the European Union’s Space program.

Copernicus

The global average sea surface temperature hit an all-time record high of 69.73 degrees Fahrenheit on July 31, according to a data set maintained by Copernicus, the the Earth observation component of the European Union’s Space program, which goes back as far as 1979. This particular data set measures temperatures at about 33 feet below the surface of the ocean.

“Global” in this data set is defined as the oceans beyond the polar region, between 60 degrees latitude south and north. Measuring sea surface temperatures in this extrapolar region is considered standard for climate monitoring, but the sea surface temperature among all ice-free oceans also reached a record-high level in July, Copernicus said.

The previous record was set in March 2016 — March is the time of year when oceans in the southern hemisphere get warmest, and because the southern hemisphere has more ocean it tends to be the hottest peak of the year, Gavin Schmidt, director of the NASA Goddard Institute for Space Studies, told CNBC.

In addition to the daily record on July 31, the monthly sea surface temperature for July was the hottest July on record, “by far,” Copernicus said. The anomaly for July, which is a measurement of the difference between what the sea surface temperature was and a long-term average for that month, was 0.92 degrees Fahrenheit, according to Copernicus.

Sea surface temperature anomalies displayed in degrees Celsius, compared to a 1991-2020 reference period, averaged over the extrapolar global ocean for the month of July from 1979 to 2023. The chart was made by and is shared with the courtesy of Copernicus, the the Earth observation component of the European Union’s Space program.

Copernicus

These record sea surface temperatures arise from multiple factors, including the El Niño weather pattern, which is currently in effect. “The particularly warm waters this year have to do with climate variations like El Niño in the Pacific and a similar pattern in the Atlantic on top of the steady ocean warming of climate change,” Fox-Kemper told CNBC.

“These climate variations occur when sea surface temperature patterns of warming and cooling self-reinforce by changing patterns of winds and precipitation that deepen the sea surface temperature changes.”

But global warming is also contributing. “It would be nearly impossible to reach these ocean temperatures without the added boost of greenhouse gasses from fossil fuel burning and other human activities,” Fox-Kemper told CNBC.

Human-caused greenhouse gas emissions are adding the equivalent of a permanent El Niño worth of heat to the climate every five to ten years, Zeke Hausfather, energy systems analyst and data scientist with a strong interest in climate science and policy and a research scientist at Berkeley Earth, told CNBC.

The recent bout of record-breaking sea surface temperatures are part of a long-term trend. “The last 10 years have been the warmest since at least the 1880s for sea surface temperature,” Castillo told CNBC.

Currently, 44 percent of the global ocean is experiencing what’s called a “marine heatwave,” according to Sarah Kapnick, chief scientist at the National Oceanic Atmospheric Administration. That’s the highest percentage of the global ocean experiencing a marine heatwave since 1991, Kapnick told CNBC via a spokesperson. A marine heatwave is defined as when the ocean temperatures are higher than 90% of the previous observations for that region at that time of year, according to NOAA.

So why does it matter that the oceans are getting hotter?

Warmer oceans make stronger storms

“The most powerful storms on earth — hurricanes and tropical and extratropical cyclones — extract much of their energy from warm, moist air near the ocean surface. Hotter seawater means warmer and moister air, which then has more energy to release leading to stronger storms,” Fox-Kemper told CNBC.

This explains why the most prevalent paths for strong storms follow warm ocean currents like the Gulf Stream and Kuroshio in the Northern Hemisphere, Fox-Kempler said.

In September, the streets of downtown Fort Myers were flooded from Hurricane Ian. This sort of damage can disrupt medical and food supply chains that can raise health risks for diabetics as well as others with chronic diseases. Itâs one of the surprising impacts from climate change that Florida and other coastal states face.

Miami Herald | Tribune News Service | Getty Images

Evaporation of water vapor from the ocean surface, which makes the moist air that drives the stronger storms, is a factor of ocean temperatures and wind speed, and the impact of ocean temperature on that equation is “highly non-linear,” Kirtman told CNBC, meaning that small changes in temperature lead to large increases in evaporation. When water vapor condenses, it releases heat into the atmosphere, which starts a positive feedback loop. “So, if the atmosphere is more moist, there is more condensational heating which intensifies the storm,” he said.

The impact of the warming sea waters on hurricane development varies depending on what region of the ocean sees the highest increase in temperature, Michael Lowry, a hurricane specialist and storm surge expert, told CNBC. The ocean temperatures in the main development region for hurricanes, like the deep tropical Atlantic south of the 20 degrees latitude, are especially critical.

“This is what seasonal hurricane outlooks like those issued by NOAA last week are keying in on,” Lowry told CNBC, referring to a hurricane forecast outlook where NOAA said the warming oceans would boost hurricane activity for the remainder of the season.

But wherever a hurricane forms, the hot oceans will strengthen it. “The extreme sea surface temperature is like dry powder when storms get going. As we say in this business, it only takes one,” Lowry said.

Fish populations will migrate or die

Fish populations depend on specific temperatures.

“All species have a preferred and a lethal temperature range. Once the upper border of the preferred temperature range is reached, they go deeper or pole-ward to cooler waters, if they can,” Rainer Froese, senior scientist at the Helmholtz Centre for Ocean Research in Germany told CNBC. “Already at the upper tolerance range, growth and reproduction are hampered. At the upper lethal range, they die.”

Fish will migrate towards colder waters, if they can. Fish that lived in Florida will be found in New York waters, and fish that lived in New York waters will migrate to Nova Scotia, according to Daniel Pauly, professor at the University of British Columbia‘s Institute for the Oceans and Fisheries. “Individuals are found, especially in the summertime, to reach areas that they never reach before,” Pauly told CNBC.

Fisherman Vigfus Asbjornsson (L) sorts his catch of cod and pollack on August 16, 2021 in Hofn, Hornafjordur, Iceland. Global warming is contributing to a rise in temperatures in the waters around Iceland, which is effecting the fishing industry. Changing temperatures have a strong influence on where species of fish find habitat, leading to shifts in the fishing catch. One local fisherman also said the spawning grounds of the fish he catches are moving farther north year by year. Iceland is undergoing a strong impact from climates change, including accelerated melting of the island’s many glaciers but also new opportunities for agriculture.

Sean Gallup | Getty Images News | Getty Images

Warmer sea water is dangerous for fish for two reasons: “Warmer water contains less oxygen than cold water, but the metabolic oxygen demand of fish is higher in warm water,” Lorenz Hauser, professor at the School of Aquatic and Fishery Sciences in Seattle, told CNBC.

“Fish metabolism depends very much on water temperature, and with warmer water, fish need more food to maintain their bodies and grow,” Hauser told CNBC. “On the other hand, ecosystems change with warmer water, and there may not be sufficient prey around. This was the case with the recent stock collapse of Pacific cod in Alaska.”

While fish may have a chance to migrate if sea water changes are gradual, in a sudden ocean temperature increase like a heatwave, the fish will die, Pauly told CNBC. This is particularly true for larger fish because the surface of the gills on a fish do not grow as fast as the total weight. The bigger fish have less gill area per unit of weight in the same species, Pauly said.

“In the future, we will see massive changes in regional species composition, and lots of die-offs where species cannot escape fast enough, or where they fall prey to predators or are out-competed by species that they have not encountered before,” Froese told CNBC.

Coral reefs are dying

Javier Solar, a member of the Coral Restoration Foundation, brings up threatened coral transplants from the Florida Keys waters for safe keeping on land until the waters cool off. The threat of coral bleaching is extreme as the water temperatures hit over 90 degrees. Members of Coral Restoration Foundation work to save coral species that are threatened by extremely warm waters due to global warming in the Florida Keys. Coral that had been out planted is being removed from the ocean for safe keeping until the water cools down.

Carolyn Cole | Los Angeles Times | Getty Images

Coral reefs thrive in ocean temperatures between 73 and 84 degrees Fahrenheit, but they can survive in both higher and lower temperatures for short periods of time, Castillo told CNBC. But the hot ocean temperatures in Florida have caused “wide-spread coral bleaching,” Castillo said. Coral bleaching happens when the over stressed corals expel zooxanthellae, an algae that they need to survive.

“Although coral can survive bleaching and re-grow their zooxanthellae, these bleaching events debilitate the coral. In the case of the recent heat wave, outright coral die off were reported,” Castillo told CNBC.

Coral reefs are critical to the marine ecosystems. About a quarter of marine species depend on the coral reefs in some capacity, Castillo said.

More dangerous algae blooms

“Microorganisms like it hot,” Hans W. Paerl, professor of marine and environmental sciences at the University of North Carolina at Chapel Hill’s Institute of Marine Sciences, told CNBC. “The higher the temperature and the faster they grow, and so this really has been a boon to them.”

The organisms that can grow really quickly in hot ocean temperatures and cause harmful algae blooms include dinoflagellates and diatoms, which are also called sometimes called microalgae or red tide, and cyanobacteria, which is sometimes called blue-green algae.

In an aerial view, brownish water is visible in the waters at the Berkeley Marina as an algal bloom grows in the San Francisco Bay on August 01, 2023 in Berkeley, California. The San Francisco Regional Water Quality Control Board has warned that a toxic algae bloom in the San Francisco Bay, similar to one that occurred one year ago and killed tens of thousands of fish, has returned to the Bay.

Justin Sullivan | Getty Images News | Getty Images

Both people and animals can get sick by being exposed to these algal blooms or eating seafood contaminated with them. The severity of the sickness depends on type of algae and how long exposure lasted, according to the Centers for Disease Control and Prevention.

Algal blooms can become more intense when nitrogen and phosphorus in fertilizer runoff gets to oceans, and climate change is impacting the pace and cadence of fertilizer runoff because of the increasing severity of both rain storms and dry spells.

“When you have a major storm, it’s going to pick up more nutrients from the land and flush them into our coastal and ocean systems,” Paerl told CNBC. “If a wet period is followed by an extensive drought, then you actually enhance the growth for some of these organisms, because they like stagnant, dry conditions, as well.”

The combination of hotter waters and more fertilizer runoff will drive the algae and bacteria growth and respiration, which creates low oxygen zones that impacts fish populations and can in some instances cause “dead zones,” Paerl told CNBC. “That, of course, has huge implications for the food web, and ultimately for us, in terms of consumers of fish and shellfish.”

As the oceans warm, the blooms themselves are migrating to cooler waters where they’d never been seen before, says Christopher Gobler, professor at Stony Brooke University’s School of Marine and Atmospheric Sciences who researches Coastal ecosystem ecology, climate change, harmful algal blooms.

“Harmful algal blooms that may have never had a chance to form in the past have become dense and widespread in regions such as Alaska and northern Europe,” Gobler told CNBC. “This is highly problematic as these new occurrences can take ecosystems and communities by surprise, exposing marine life and, in some cases humans, to toxins that were regionally unknown, causing mass mortalities and/or illnesses.”

Long-term: Sea level rise

“Water expands as it gets warmer,” Gary Griggs, professor of earth and planetary sciences at the University of California in Santa Cruz, told CNBC.

Kimberly McKenna, Associate Director at Stockton University Coastal Research Center points at a graph indicating rising sea levels in Atlantic City, New Jersey on October 26, 2022. Ten years after the devastating hurricane Sandy, the seaside town of Atlantic City, on the American east coast, has fortified its famous promenade between its casinos and the Atlantic Ocean. But behind the beaches, for the inhabitants of certain neighborhoods, the flooded streets are almost part of everyday life.

Angela Weiss | Afp | Getty Images

So broadly speaking, warmer oceans will lead to sea level rise and coastal flooding risk. “As the ocean warms it expands, much like a gas, and takes up more space, hence sea level rise. Warmer oceans in the higher latitudes means less sea ice which allows the oceans to warm further,” Kirtman told CNBC. “This is known as a positive feedback.”

Generally, about two-thirds of global sea level rise is caused by ice melt from Antarctica, Greenland and continental glaciers and the other one-third from “overall temperature increase,” Griggs said. But also, the recent trend in record-high sea surface temperatures aren’t enough on their own to cause any noticeable changes in sea level, Griggs noted.

“Any large-scale increase in ocean water temperature increases sea level and the amount can be determined if you know the total volume of water affected and the amount of temperature increase by using the coefficient of thermal expansion,” Griggs told CNBC. But there are approximately 330 million cubic miles of sea water, and it takes “a lot of heat to substantially increase sea level rise.”

Economic impacts and looking ahead

Right now, it’s really too soon to measure the economic impact of these record sea surface temperatures, Judith Kildow, founder and director emeritus of the National Ocean Economics Program, told CNBC. Years of more data are needed. In some cases, people who depend on the oceans for their livelihood are adapting, Kildow said. “Fishermen are turning their boats into whale watching enterprises when they no longer can fish profitably,” Kildow told CNBC.

But there will be cascading economic impacts. “Bleached coral reefs, rising sea levels from warming, and migration of fisheries north to their normal temperatures will have an effect on the fishing industry and coastal tourism as well as the value of coastal real estate,” Kildow told CNBC. AStronger storms, driven by warming ocean waters, will cause more devastating and expensive damage if they make landfall. “Value of costal real estate will drop precipitously in a short period of time,” Kildow said.

If it sounds like a lot of bleak news, it is. Asked if there were any benefits to the warming oceans, Schmidt from NASA responded: “Slightly extended beach swimming period?”

The best way to ameliorate the whole cornucopia of negative impacts is to reduce greenhouse gas emissions.

“Of course, the key to all of this is less fossil fuel combustion,” Paerl told CNBC. It’s also important to reduce the release of other greenhouse gas like methane and nitrogen oxides, he said. “So that’s one thing we should all be doing is consuming and burning less fossil fuels.”

The $52.6 billion plan to save the NYC region from climate change

Technology

FTC sues Uber, says company charged for Uber One without consent

Published

3 hours ago

April 21, 2025

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FTC sues Uber, says company charged for Uber One without consent

Travelers walk past a sign pointing toward the Uber rideshare vehicle pickup area at Los Angeles International Airport (LAX) on February 8, 2023 in Los Angeles, California.

Mario Tama | Getty Images

The Federal Trade Commission on Monday sued Uber, accusing the ride-hailing and delivery company of deceptive billing and cancellation practices tied to its subscription service.

The agency claims Uber violated the FTC Act and the Restore Online Shoppers’ Confidence Act by providing misleading information about its Uber One subscription service, failing to provide a simple way for users to cancel their membership, and charging them without their consent.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” FTC Chair Andrew Ferguson said in a statement. “The Trump-Vance FTC is fighting back on behalf of the American people.”

Uber spokesperson Noah Edwardsen said in a statement that the company is “disappointed” by the FTC’s complaint, but that it’s confident the courts will rule in its favor.

“Uber One’s sign-up and cancellation processes are clear, simple, and follow the letter and spirit of the law,” Edwardsen said. “Uber does not sign up or charge consumers without their consent, and cancellations can now be done anytime in-app and take most people 20 seconds or less.”

Uber One, launched in 2021, costs $9.99 a month or $96 a year and offers perks like fee-free delivery and discounts on some ride bookings, delivery and pickup orders.

In its complaint, the FTC argues that Uber advertises its subscription as offering “savings of $25 a month” without calculating the monthly cost of its membership. It also accuses Uber of charging consumers before their billing date.

When users try to cancel their Uber One subscription, Uber makes it “extremely difficult,” while some users are told to contact customer service representatives to proceed with their cancellation, but are given no way to contact them, the FTC alleged. Some users claim that Uber charged them for another billing cycle after they cancelled their Uber One membership, the agency said in its complaint.

The complaint marks the first FTC action against a major tech company since President Donald Trump began his second term in January. The FTC has several ongoing lawsuits against tech’s megacap companies, including Meta, Google and Amazon. Some cases were brought during President Joe Biden’s presidency, but Trump’s FTC was aggressive during his first term, most notably going after Meta.

Ferguson told CNBC last month that the agency will continue to closely scrutinize major tech companies.

“I’ve said since day one Big Tech is one of the main priorities of the Trump-Vance FTC,” Ferguson said. “It’s one of the reasons the president appointed me to this position.”

Uber and CEO Dara Khosrowshahi each reportedly donated $1 million to President Trump’s inaugural fund, joining a lengthy roster of tech companies and executives attempting to cozy up to the incoming administration.

Khosrowshahi followed that up in January in an interview at the Wall Street Journal’s Journal House in Davos.

“We want to engage with every government we are a part of,” Khosrowshahi said, adding that a “diversity of voices” in government can be a positive, the Journal reported.

Technology

Musk says he’s looking to put ‘proper value’ on xAI during investor call, sources say

Published

4 hours ago

April 21, 2025

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Musk says he's looking to put 'proper value' on xAI during investor call, sources say

Tesla CEO Elon Musk attends a cabinet meeting at the White House in Washington, D.C., U.S., April 10, 2025.

Nathan Howard | Reuters

Elon Musk is looking to put “proper value” on his artificial intelligence startup xAI, sources told CNBC’s David Faber.

The comments came during a call with xAI investors last week, sources familiar with the matter told Faber. While the Tesla CEO didn’t explicitly address an upcoming funding round, the sources interpreted the comments as a sign that xAI is getting set up for a significant capital raise in the near future.

CNBC was unable to confirm that the company is actively looking at a raise.

The sources also said the company discussed revenue at a potential run rate of $1 billion or more on the call.

The raise would mark another significant milestone for xAI just months after CNBC reported that the company was raising up to $6 billion at a $50 billion valuation to buy up 100,000 Nvidia chips. The funding was reportedly a combination of $5 billion from Middle East sovereign funds and $1 billion from other investors.

The biggest questions facing Big Tech ahead of earnings

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7 hours ago

April 21, 2025

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The biggest questions facing Big Tech ahead of earnings

Guests including Mark Zuckerberg, Lauren Sanchez, Jeff Bezos, Sundar Pichai and Elon Musk attend the inauguration of Donald J. Trump in the U.S. Capitol Rotunda in Washington, D.C., on Jan. 20, 2025. Trump takes office for his second term as the 47th president of the U.S.

Julia Demaree Nikhinson | Getty Images

As tech’s megacap companies enter first-quarter earnings season this week, get ready to hear one word on repeat: uncertainty.

President Donald Trump’s on-again, off-again approach to tariffs has created market chaos this month — including five days of massive moves for the Nasdaq — as investors try to gauge the future impact on revenue and earnings for American companies that rely on imports.

Beyond the increase in costs are the follow-on effects, such as the likely drop-off in ad spending that comes with tighter budgets and the potential slowdown in consumer spending that could result from higher prices and rising unemployment.

Trump’s tariffs face almost universal disapproval in the corporate world, which became clear as trillions of dollars in value evaporated in a matter of days, and some of the president’s most vocal supporters, including Elon Musk, voiced opposition.

Beyond being bad for business, the tariff picture changes by the day, making it almost impossible for companies to plan for the future when considering where to manufacture, whether to continue hiring and how aggressively to market products.

On April 9, following four days of market turmoil, Trump dropped tariffs to 10% for most trade partners (while increasing the levy on China to 145%) for 90 days to allow negotiations with those countries. Since then, the Trump administration has signaled that phones, computers and chips would be exempted from the new tariffs, but the president then added to the confusion by casting doubt on the duration of the exemptions, which were viewed as a boon most notably for Apple.

When Tesla kicks off tech earnings on Tuesday, followed by Alphabet on Thursday, executive teams will likely face forward-looking questions that may be difficult to answer.

Meta, Microsoft, Amazon and Apple are all slated to report results next week. Chipmaker Nvidia reports in late May.

As of Thursday’s close, the Nasdaq was down 16% for the year and 6% in April. The first quarter was the worst for the index in almost three years.

Here are some of the key issues facing each tech megacap, in order of when they report:

Tesla

A Tesla car showroom stands doused in blue paint following vandalism by activists of the group New Generation on March 31, 2025 in Berlin, Germany.

Omer Messinger | Getty Images

Tesla’s Tuesday report lands against a murky backdrop for the electric vehicle maker.

The stock is down 40% for the year so far after closing out its worst quarter since 2022 in March. The big story has been Musk’s many distractions outside of Tesla, most notably his work slashing the federal government as part of the Trump administration.

Tariffs are also a problem, as the company relies on suppliers in Mexico and China for items like automotive glass, printed circuit boards and battery cells, among other parts essential for the production of its cars. Tesla has sought an exemption from the U.S. Trade Representative for equipment imported from China that it uses in its factories.

On the company’s fourth-quarter earnings call in January, Tesla CFO Vaibhav Taneja cautioned shareholders that the Trump administration’s tariffs would have an “impact on our business and profitability.”

For the first quarter, analysts are projecting revenue growth of less than 1% from a year earlier, followed by a slight year-over-year slippage in the second quarter. Investors will want to see if Musk can provide any clarity on how costly tariffs could be going forward. Musk has made his thoughts on the matter fairly clear, calling Trump’s top trade advisor and tariff proponent Peter Navarro a “moron” and “dumber than a sack of bricks.”

Tesla’s business was already under pressure before tariffs and uncertainty roiled markets. In early April, the company reported 337,000 vehicle deliveries in the first quarter, a 13% decline from the previous year. To win over customers in the face of a Musk-induced backlash, and to get customers to buy inventory cars when a new Model Y is on the way, the company had to offer an array of incentives and discounts in the first quarter.

Piper Sandler analysts last week revised their Tesla price target lower, saying after the first-quarter whiff on deliveries that “gross margin is probably trending near multi-year lows.”

Alphabet

Alphabet Inc. and Google CEO Sundar Pichai speaks during the inauguration of a Google Artificial Intelligence (AI) hub in Paris on February 15, 2024.

Alain Jocard | AFP | Getty Images

Google parent Alphabet faces an online ad market that’s on edge due to concerns about how Trump’s tariffs will affect the economy and business spending.

A note last week from Piper Sandler pointed to fears of an 18% impact to growth forecasts for the 2025 global ad market. Chinese discount e-commerce apps Temu and Shein, which have been big advertisers in the U.S. in recent years, are of notable concern, and Temu has already pulled way back on spending.

Retail represents at least 21% of Google ad revenue, according to estimates by Oppenheimer & Co., which said that Meta has even more exposure to ad pullbacks.

Investors are equally concerned about the cloud business, as Alphabet is a massive spender on imported data center infrastructure, and is going even bigger to keep up with the AI boom. The company has said it plans to spend $75 billion this year, mostly going toward servers and data centers to power AI and its cloud business.

It’s unclear whether Google will adjust that figure, but such a move may be necessary. Mizuho analysts wrote on April 8 that roughly 25% of Google channel partner customers have reduced spending on the company’s cloud, and “we expect that mix to increase to 50% from elevated customer hesitation” after the tariff announcement.

Though Alphabet doesn’t make a large chunk of its revenue from consumer hardware, it does produce its Pixel and Fitbit products abroad and runs its services on the most popular phone carriers. Pixel products are manufactured in India, after the company began diversifying its supply chain away from China.

Microsoft

Microsoft CEO Satya Nadella waves during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington. The company also gave an update on Copilot, its AI tool.

Stephen Brashear | Getty Images News | Getty Images

Microsoft makes PCs and video game consoles, but it derives most of its revenue from selling software. The company buys lots of hardware to operate cloud services for its clients, transactions that are subject to significantly higher costs due to tariffs.

In early January, Microsoft announced it was aiming to spend more than $80 billion this fiscal year on data centers capable of handling artificial intelligence workloads.

Where investors may be most concerned for Microsoft is in the company’s expansive customer base and whether Trump’s trade policies will lead clients to cut spending on products.

“There’s not a direct tariff impact, and so what we talk about is indirect,” said Brent Bracelin, an analyst at Piper Sandler. He recommends buying Microsoft shares.

Recent surveys indicate that software sales cycles are lengthening and interest in buying new software is waning, Bracelin said. Other analysts have said Microsoft, along with Salesforce, are among the software vendors that are best able to handle higher tariffs.

“We see MSFT and CRM as two of the names best positioned to weather this macro storm as they are already back at/near 2022 trough levels and can adjust spending/capex levels for this ‘new reality’ if needed to preserve” earnings and cash, Evercore ISI analysts wrote in a note earlier this month.

Amazon

Attendees walk through an exposition hall at AWS re:Invent, a conference hosted by Amazon Web Services, in Las Vegas on Dec. 3, 2024.

Noah Berger | Getty Images

Amazon’s position as an e-commerce juggernaut gives it hefty exposure to potential tariff headwinds, and not just because of consumer spending.

More than 60% of Amazon’s sales are from items sold by third-party merchants, and many of those sellers source their products from China. The remaining 40% comes from vendors Amazon purchases from directly.

Within days of Trump’s new tariffs, Amazon canceled some of those merchandise orders from vendors in China, while Amazon sellers have said they’re considering raising the price of their products.

Investors will be listening for any commentary around the impact of tariffs on its online stores business, especially as Amazon’s summer Prime Day discount event nears. Amazon CEO Andy Jassy told CNBC last week the company will work to keep prices low on its website, but that sellers may need to “pass the cost” of tariffs on to consumers.

“Amazon is probably the best-positioned company in retail and e-commerce to take advantage of the chaotic situation from tariffs and shifting global supply chains,” Barclays analysts, who have a buy rating on Amazon, wrote in a recent report. “The pandemic was a precursor of this, during which Amazon was able to gain share and move quicker than peers despite its massive size.”

The company’s advertising unit could be “pressured more if trade wars get worse,” analysts at Cantor Fitzgerald, who also recommend buying the stock, wrote in a note on April 15. Most of Amazon’s ad revenue comes from sponsored product ads that appear in search results on its website. Businesses could pull back on their ad spend as they look to conserve costs or reduce traffic to products sourced from China.

And like the other hyperscalers, Amazon has all of the potential added costs associated with tariffs on advanced chips and other data center equipment, depending on what products end up getting exempted. Amazon Web Services is the market leader in cloud infrastructure, ahead of Microsoft and Google.

Apple

People shop at an Apple store in Grand Central Station in New York on April 4, 2025.

Michael M. Santiago | Getty Images

Apple has outsized exposure to Trump’s tariffs, as the company generates about three-quarters of its revenue from selling devices that are mostly manufactured in Asia. While Apple got an apparent reprieve when the Trump administration suspended tariffs on computers from China earlier this month, the company still faces significant uncertainty with the possibility of another Trump shift.

Apple has tried to hedge its China risk in recent years, bolstering manufacturing capacity in countries including Vietnam and India. Officials in India said that Apple loaded planes full of iPhones made in the country and sent them to the U.S. in response to tariffs.

Wall Street has been dumping shares of the iPhone maker, sending the stock down 8% in March and another 11% so far this month, a recognition of how damaging long-term tariffs would likely be on Apple’s business.

CEO Tim Cook, along with many of his tech counterparts, has tried cozying up to President Trump, donating to his inauguration in January and attending the event in Washington, D.C. But investors have yet to hear how Cook and the rest of the management team plan to deal with the increased costs, how the company is managing inventory and how it will all add up to affect margins.

Nvidia

Nvidia CEO Jensen Huang delivers the keynote address during the Nvidia GTC 2025 at SAP Center on March 18, 2025 in San Jose, California.

Justin Sullivan | Getty Images News | Getty Images

Nvidia’s graphics processing units (GPUs) are key to the AI infrastructure buildouts across the tech industry. While semiconductors have a tariff exemption, many of the AI servers that have driven the recent boom have been shipped to the U.S. as mostly finished computers, putting them at risk of tariffs.

Since an AI server can cost upwards of $50,000, even small tariffs could have a big impact on costs. And the almost tenfold increase in Nvidia’s stock price over the past two calendar years has baked into it an assumption that sales and profit margins will keep inflating.

Investors will want to hear from CEO Jensen Huang about his relationship with Trump, given the potential importance of that dynamic.

Nvidia said last week that it would produce its “AI supercomputers” in Texas, days after Huang met with Trump at his Mar-a-Lago club in Florida. Nvidia also said it would buy and package chip production services from companies in Arizona. The company said it would “produce” a half-trillion dollars in AI infrastructure over the next four years.

The White House praised the move, and said in a press release that Nvidia was leading an “American-made chips boom.” Nvidia’s plans for U.S. production will rely on the company getting exceptions for many of the parts it will need to build the computers.

Nvidia’s concern with the government isn’t just about tariffs. The company said last week that it will take a quarterly charge of about $5.5 billion tied to exporting H20 graphics processing units to China and other destinations.

During President Joe Biden’s administration, the U.S. restricted AI chip exports and then updated the rules to prevent the sale of more advanced AI processors. The H20 is an AI chip for China that was designed to comply with U.S. export restrictions. It generated an estimated $12 billion to $15 billion in revenue in 2024.