As of early February 2025, six of the U.S. stock "Magnificent Seven" tech giants—Apple, Alphabet, Amazon, Meta, Microsoft, and Tesla—have released their Q4 2024 earnings, with Nvidia set to report on February 26. The results revealed a stark divide between winners and losers in the industry.
Apple and Meta stood out with standout performance. Apple achieved its "best quarterly results in history," with Q4 revenue reaching $124.3 billion (up 4% year-over-year) and net profit hitting $36.3 billion (up 7% year-over-year). However, the company faces hidden risks: iPhone revenue slipped 3% year-over-year, and sales in the Greater China market dropped 13%. Meta’s quarterly revenue surged 21% to $48.39 billion, with net profit jumping 49% to $20.84 billion. Its core digital advertising business contributed 97% of total revenue, driven by the commercialization of short-video platform Reels and AI-powered ad systems, while daily active users rose to 3.35 billion.
In contrast, Tesla, Alphabet, and Amazon struggled. Tesla’s Q4 net profit plummeted 71% year-over-year, with core auto business revenue falling 8%. Its full-year 2024 deliveries declined 1% to 1.7892 million units, and vehicle average selling prices dropped $2,200 quarter-over-quarter. Alphabet’s Q4 revenue reached $96.469 billion (up 12% year-over-year), but its cloud business revenue of $11.96 billion (up 30%) missed analyst expectations, and the company’s stock fell 7% post-earnings after announcing a 44% hike in 2025 AI infrastructure spending to $75 billion. Amazon’s AWS cloud business grew 19% to $28.786 billion, narrowly meeting expectations, but its 2025 Q1 revenue guidance of 5-7% growth (the slowest on record) led to a 7% plunge in after-hours trading.
Microsoft’s Q4 earnings exceeded expectations, with revenue up 12% to $69.632 billion, but its Azure cloud service growth slowed to 31% (down from 33% in the previous quarter), falling short of forecasts. Notably, the tech giants’ AI investment spree shows no signs of abating: Amazon plans to boost 2025 capital expenditure to $100 billion, Microsoft will invest $80 billion in AI data centers, and Meta earmarks $60-65 billion for generative AI, bringing the combined AI-related capital expenditure of major firms to $331 billion.
The market’s enthusiasm for AI spending has been tempered by DeepSeek’s breakthrough. The low-cost AI model’s rise triggered a sell-off in late January, with Nvidia’s market value shrinking by nearly $600 billion in a single day and combined losses for Microsoft, Alphabet, and Meta exceeding $400 billion. Analysts warn that the tech sector’s growth narrative, once driven by capital expenditure, now faces scrutiny over profitability. U.S. Bank strategist Michael Hartnett cautioned that the "Magnificent Seven" could become underperformers in 2025, while investors await Nvidia’s earnings to gauge the future of AI chip demand.
This earnings season underscores a critical turning point for the tech industry: as cloud growth moderates and AI investment costs soar, the sector is shifting toward profit-driven growth and valuation restructuring, with 2025 shaping up to be a challenging year for tech stock investors.
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