Robust cloud spending among the “Magnificent Seven” hyperscalers will outpace U.S.-China tariff jitters this week, Wedbush said ahead of earnings from Microsoft (MSFT, Financial), Meta (META, Financial), Amazon (AMZN, Financial) and Apple (AAPL, Financial).
“Robust cloud spending for the hyperscalers, a rebound in digital advertising and the AI Revolution strength is good news for tech investors,” analyst Daniel Ives wrote in a note, adding that investors should remain “confidence boosters” rather than fear the tariff backdrop.
With many IT budgets set before tariffs hit, Ives sees AI deals and capex already locked in. He estimates 15% of overall IT budgets are now AI-focused and thus protected, while lower-priority spend faces delay.
Wedbush expects Microsoft and Amazon to post strong cloud numbers and forward guidance signaling continued AI demand. Apple, Meta, Amazon and Microsoft remain core holdings, despite tariff uncertainty.
On near-term earnings variability, Wedbush's base case assumes 2025–26 demand and costs trim results by roughly 10%, rising to a 15%–20% hit in a worst-case tariff standoff, or a modest 2%–5% drag if negotiations ease by summer.
Over the past five trading days through April 28, the Roundhill Magnificent Seven ETF (MAGS, Financial) returned +4.0%. MAGS surged early in the week, peaking around +6.3% mid-week before giving back some gains by Friday. Invesco QQQ Trust (QQQ, Financial) posted +2.8%, cresting near +4.1%, while the SPDR S&P 500 ETF Trust (SPY, Financial) lagged at +2.0% with the least volatility.
Microsoft and Meta report Wednesday after the bell; Amazon and Apple follow Thursday post-market.
