Sundar Pichai, chief executive officer of Alphabet Inc., during Stanford’s 2024 Business, Government, and Society forum in Stanford, California, US, on Wednesday, April 3, 2024.
Justin Sullivan | Getty Images
As tech’s behemoths get set to report earnings this week, they do so facing a mountain of drama.
At Google, there have been protests and restructurings, while Tesla just announced mass layoffs, price cuts and a Cybertruck recall. Microsoft’s OpenAI relationship faces fresh scrutiny and Facebook parent Meta’s major rollout of its new artificial intelligence assistant last week didn’t go so well.
The troubling news comes alongside a generative AI gold rush, as Big Tech players race the new technology into their vast portfolios of products and features to ensure they don’t fall behind in a market that’s predicted to top $1 trillion in revenue within a decade.
Wall Street has been openly jittery about the upcoming results, pushing the tech-heavy Nasdaq Composite down 5.5% last week, the steepest weekly slump since November 2022. Nvidia, which has emerged as an AI darling, plunged 14%, leading the slide.
“Whether this tech sell-off continues, I think really depends on how the mega-cap tech reports,” said King Lip, chief strategist at BakerAvenue Wealth Management, in an interview with CNBC’s “Closing Bell” on Monday. “Valuations have definitely been more reasonable now, now that we’ve had a little bit of a correction.”
Lip said that in the last couple of weeks his firm has “trimmed some of our tech exposure.”
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Tech companies have been pouring record sums into emerging generative AI startups and investing heavily in Nvidia’s processors to build AI models and run massive workloads. While that market is growing rapidly, investors are growing anxious that other issues at hand could lead to a pullback in spending.
On this week’s earnings calls, companies are likely to continue highlighting their efforts to cut costs and bolster profits, an efficiency theme that’s been running across the industry since early last year.
Tesla kicks off tech earnings season after the close of trading on Tuesday, with shares of the electric vehicle maker trading at their lowest since January 2023. Meta, coming off its biggest weekly stock slide since August, follows on Wednesday. Microsoft and Google parent Alphabet report on Thursday, giving Wall Street a close look at how businesses are planning their budgets for AI infrastructure.
Here are some of the biggest issues facing the Big Tech companies in their reports this week.
Tesla
A Tesla Cybertruck sits on a lot at a Tesla dealership on April 15, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Tesla shares fell for a seventh straight day on Monday and are now down 43% year to date. Elon Musk’s EV company is expected to report a decline in sales of about 5%, which would be the first year-over-year revenue drop since 2020, when the Covid pandemic disrupted operations.
Tesla’s earnings follow a bruising quarterly deliveries report and additional price cuts to the company’s vehicles and its premium driver assistance system.
Last week, the EV maker said it was laying off more than 10% of its workforce, and the same day executives Drew Baglino and Rohan Patel announced their departures.
“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk wrote in a memo announcing the layoffs.
Two days later, Musk informed employees via email that the company had sent out “incorrectly low” severance packages to some laid-off workers. And on April 12, Tesla issued a voluntary recall of more than 3,800 Cybertrucks to fix a “stuck pedal” issue depicted in a viral TikTok video.
“Since late 2023, sentiment on Tesla (TSLA) has deteriorated,” wrote John Murphy, an analyst at Bank of America, in a note on Monday.
Meta
Meta has been a good bet for investors this year despite last week’s slip. The stock is up 36% in 2024 after almost tripling last year, when CEO Mark Zuckerberg told Wall Street that 2023 would be the company’s “year of efficiency.”
But Meta still faces plenty of questions. For one, its Reality Labs division, which houses all of the virtual reality technologies for the nascent metaverse, is expected to show a quarterly loss of over $4 billion for a second straight period.
When it comes to AI, Meta debuted its assistant — Meta AI — on WhatsApp, Instagram, Facebook and Messenger last week. It was the company’s biggest-ever AI initiative and is set to go up against OpenAI’s ChatGPT and Google‘s Gemini.
But Meta AI quickly led to controversy. The assistant reportedly joined a private parents’ group on Facebook and claimed to have a gifted and disabled child, sounding off in the comments about its experiences with New York-area educational programs. In another case, it reportedly joined a Buy Nothing forum and tried to do free giveaways for nonexistent items.
Now, Meta has to show that it’s ready for what’s certain to be a heated election season, as President Joe Biden and Republican Donald Trump prepare to square off for a second time. Dating back to Trump’s successful presidential bid in 2016, Facebook has been a problematic place for political discourse and misinformation.
Meta is expected to report revenue growth of 26% from a year earlier to $36.16 billion, according to LSEG. That would mark the fastest rate of expansion for any period since 2021.
Alphabet
Sundar Pichai, chief executive officer of Alphabet Inc., during Stanford’s 2024 Business, Government, and Society forum in Stanford, California, US, on Wednesday, April 3, 2024.
Loren Elliott | Bloomberg | Getty Images
On a busy Thursday for tech earnings, Alphabet is likely to capture the most attention.
Last week, finance chief Ruth Porat announced a restructuring of Google’s finance department, a move that will include layoffs and relocations, as the company drives more resources toward AI.
On the same day, Google terminated 28 employees, according to an internal memo viewed by CNBC, following a series of protests against labor conditions and the company’s contract to provide the Israeli government and military with cloud computing and artificial intelligence services.
The dismissals came after nine Google workers were arrested on trespassing charges Tuesday night, staging a sit-in at the company’s offices in New York and Sunnyvale, California, including a protest in Google Cloud CEO Thomas Kurian’s office. The arrests, livestreamed on Twitch by participants, coincided with rallies outside Google offices in New York, Sunnyvale and Seattle, which attracted hundreds of attendees, according to workers involved.
On Thursday, Alphabet CEO Sundar Pichai announced a consolidation of the company’s AI teams, including responsible AI and related research teams, under the Google DeepMind umbrella. He said in a memo that “this is a business” and employees should not “attempt to use the company as a personal platform, or to fight over disruptive issues or debate politics.”
Pichai has struggled to quell employee discontent on a host of matters since the pandemic, as the company has been forced to reckon with slower growth than in years past and an investor base that’s become increasingly concerned with costs.
Analysts expect a first-quarter revenue increase of 13%, which would mark a second straight quarter of year-over-year growth in the low teens. For four straight periods, between mid-2022 and mid-2023, expansion was in single digits as advertisers pulled back due to soaring inflation and rising interest rates.
Alphabet shares are up 12% this year, topping the S&P 500, which has gained 5.1%.
Microsoft
Microsoft CEO Satya Nadella (R) speaks as OpenAI CEO Sam Altman (L) looks on during the OpenAI DevDay event on November 06, 2023 in San Francisco, California. Altman delivered the keynote address at the first ever Open AI DevDay conference.
Justin Sullivan | Getty Images
As for Microsoft, the company seemed to narrowly avoid a European Union antitrust probe into its relationship with OpenAI, after EU regulators had pointed to the possibility earlier this year.
Microsoft has invested more than $10 billion in OpenAI, whose ChatGPT chatbot kicked off the generative AI boom in late 2022. AI has been a major focus of Microsoft’s earnings calls since then, as the company serves as OpenAI’s key technology partner through its Azure cloud infrastructure.
Microsoft has invested billions of dollars in AI startup Anthropic as well, and has taken stakes in Mistral, Figure and Humane.
The company’s position in AI has been the biggest driver behind its ascent to $3 trillion in market cap, passing Apple as the most valuable U.S. company. However, the stock is only up 6.8% this year, trailing many of its peers, and some analysts see potential weakness in parts of Microsoft’s customer base, notably small and medium-sized businesses.
“MSFT has more SMB and consumer exposure than any other stock we cover,” wrote analysts at Guggenheim, in a note dated April 21. “And while those cohorts have held up surprisingly well during this soft macro period, we are starting to see some indications of weakening demand from them.”
Microsoft is expected to report sales growth of 15% in the first quarter, according to LSEG, but analysts are projecting a slowdown over each of the next three periods.
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
Elon Musk has been promising investors for about a decade that Tesla’s cars are on the verge of turning into robotaxis, capable of driving themselves cross-country, after one big software update.
That hasn’t happened yet.
What Tesla offers is a sophisticated, but only partially automated, driving system that’s marketed in the U.S. as its Full Self-Driving (Supervised) option, though many Tesla fans refer to it as FSD. In China, Tesla recently changed the system’s name to “intelligent assisted driving.”
Full Self-Driving, as it was previously called, relies on cameras and software to enable features like automatic navigation on highways and city streets, or automatic braking and slowing in response to traffic lights and stop signs.
Tesla owner’s manuals warn users that FSD “is a hands-on feature” that requires them to pay attention to the road at all times. “Keep your hands on the steering wheel at all times, be mindful of road conditions and surrounding traffic,” the manuals say.
But many of Tesla’s customers ignore the fine print and use the system hands-free anyway.
Tesla’s partially automated driving systems have been a source of inspiration for its stalwart fans. But they’ve also caused controversy and concern for public safety after reports of injurious and fatal collisions where Tesla’s standard Autopilot or premium FSD systems were known to be in use.
FSD does a lot of things “amazingly well,” said Guy Mangiamele, a professional test driver for automotive consulting firm AMCI Testing, during a recent long drive in Los Angeles. But he added that “the times that it trips up, you could kill somebody or you could hurt yourself.”
The pressure has never been higher on Tesla to elevate the technology and deliver on Musk’s long-delayed promises.
The Tesla CEO is the wealthiest person in the world and was the biggest financial backer of President Donald Trump’s 2024 campaign. Since Trump’s January inauguration, Musk has been leading the administration’s Department of Government Efficiency effort to drastically slash the federal workforce and government spending.
The DOGE team has been connected to more than 280,000 layoff plans for federal workers and contractors impacting 27 agencies over the last two months, according to data tracked by Challenger Gray, the executive outplacement firm.
Musk’s work with DOGE – along with his frequently incendiary political rhetoric and endorsement of Germany’s far-right, anti-immigrant party AfD – has led to a tremendous backlash against Tesla.
Protests, boycotts and even criminal acts of vandalism have targeted the electric vehicle maker in recent months and led many prospective Tesla customers to turn to other brands. Meanwhile, existing Tesla owners have been trading in their EVs at record levels, according to data from Edmunds.
Tesla’s stock dropped 36% through the first three months of 2025, representing its steepest decline since 2022 and third-biggest slide for any quarter since the EV maker went public in June 2010. Tesla also reported 336,681 vehicle deliveries in the first quarter of 2025, a 13% decline from the same period a year ago.
Product unveilings and a “robotaxi launch” expected from Tesla in Austin, Texas, this year could revitalize investors’ sentiment about the company and hopefully lift its share price, Piper Sandler analysts wrote in a note following the worse-than-expected deliveries report.
On Tesla’s last earnings call, Musk promised investors that Tesla will finally start its driverless ride-hailing service in Austin in June.
To see whether the company’s FSD technology is anywhere close to a robotaxi-ready release, CNBC spent months riding along with Tesla owners who use Full Self-Driving (Supervised) and speaking with automotive safety experts about their impressions.
Auto-tech enthusiast and Tesla owner Chris Lee, host of the YouTube channel EverydayChris, told CNBC that Tesla’s system “definitely has a ways to go, but the fact that it’s able to go from where it was three years ago to today, is insane.”
Many experts, including Telemetry Vice President of Market Research Sam Abuelsamid, remain skeptical. There’s been “no evidence” that FSD is “anywhere close to being ready to be used in an unsupervised form” by June, said Abuelsamid, whose firms specializes in automotive intelligence.
Tesla FSD will “often work really well, particularly in daytime conditions” but then “randomly, in a scenario where it did fine previously, it will fail,” said Abuelsamid, adding that those scenarios can be unpredictable and dangerous.
Watch the video to learn more about the evolution of Tesla’s Full Self-Driving (Supervised) and whether it will be robotaxi-ready this June.
Microsoft owns lots of Nvidia graphics processing units, but it isn’t using them to develop state-of-the-art artificial intelligence models.
There are good reasons for that position, Mustafa Suleyman, the company’s CEO of AI, told CNBC’s Steve Kovach in an interview on Friday. Waiting to build models that are “three or six months behind” offers several advantages, including lower costs and the ability to concentrate on specific use cases, Suleyman said.
It’s “cheaper to give a specific answer once you’ve waited for the first three or six months for the frontier to go first. We call that off-frontier,” he said. “That’s actually our strategy, is to really play a very tight second, given the capital-intensiveness of these models.”
Suleyman made a name for himself as a co-founder of DeepMind, the AI lab that Google bought in 2014, reportedly for $400 million to $650 million. Suleyman arrived at Microsoft last year alongside other employees of the startup Inflection, where he had been CEO.
More than ever, Microsoft counts on relationships with other companies to grow.
It gets AI models from San Francisco startup OpenAI and supplemental computing power from newly public CoreWeave in New Jersey. Microsoft has repeatedly enriched Bing, Windows and other products with OpenAI’s latest systems for writing human-like language and generating images.
Microsoft’s Copilot will gain “memory” to retain key facts about people who repeatedly use the assistant, Suleyman said Friday at an event in Microsoft’s Redmond, Washington, headquarters to commemorate the company’s 50th birthday. That feature came first to OpenAI’s ChatGPT, which has 500 million weekly users.
Through ChatGPT, people can access top-flight large language models such as the o1 reasoning model that takes time before spitting out an answer. OpenAI introduced that capability in September — only weeks later did Microsoft bring a similar capability called Think Deeper to Copilot.
Microsoft occasionally releases open-source small-language models that can run on PCs. They don’t require powerful server GPUs, making them different from OpenAI’s o1.
OpenAI and Microsoft have held a tight relationship shortly after the startup launched its ChatGPT chatbot in late 2022, effectively kicking off the generative AI race. In total, Microsoft has invested $13.75 billion in the startup, but more recently, fissures in the relationship between the two companies have begun to show.
Microsoft added OpenAI to its list of competitors in July 2024, and OpenAI in January announced that it was working with rival cloud provider Oracle on the $500 billion Stargate project. That came after years of OpenAI exclusively relying on Microsoft’s Azure cloud. Despite OpenAI partnering with Oracle, Microsoft in a blog post announced that the startup had “recently made a new, large Azure commitment.”
“Look, it’s absolutely mission-critical that long-term, we are able to do AI self-sufficiently at Microsoft,” Suleyman said. “At the same time, I think about these things over five and 10 year periods. You know, until 2030 at least, we are deeply partnered with OpenAI, who have [had an] enormously successful relationship for us.
Microsoft is focused on building its own AI internally, but the company is not pushing itself to build the most cutting-edge models, Suleyman said.
“We have an incredibly strong AI team, huge amounts of compute, and it’s very important to us that, you know, maybe we don’t develop the absolute frontier, the best model in the world first,” he said. “That’s very, very expensive to do and unnecessary to cause that duplication.”