The chances of major technological companies vary in the rapidly changed business scene, as the increasing demand for artificial intelligence is nourishing growth in the areas of cloud and digital advertisements, while consumer electronics receives a heavy blow as a result of the global trade war led by US President Donald Trump.
Artificial intelligence saved Microsoft and “Alphabet”, the parent company of “Google”, during the first quarter of the year, giving investors the hope that their huge investments in this technology will help them overcome the repercussions of comprehensive American customs duties, according to Reuters.
On the other hand, expectations varied remarkably among companies most vulnerable to the effects of reducing consumer budgets, as chips manufacturers such as “Qualcomm” and “Samsung Electronics” and “Intel” warned that the state of economic uncertainty caused by Trump’s attempts to reorganize global trade negatively affects its business.
This contrast is highlighted how companies that focus on institutions are able to persevere in the face of economic tensions, while the demand for smartphones, personal computers, and the segments they occupy due to the decline in consumer spending.
This may warn of the challenges of Apple, which manufactures 90 percent of its products in China, and achieves about half of its revenues from iPhone phones sales. The e -commerce business of Amazon may also be affected, although the cloud computing department, which represents the largest part of its profits, is expected to stand up to Microsoft and “Google”.
“Google and Microsoft and Microsoft have not yet been affected, because they are not working in the consumer sector,” said Jill Louor, an analyst at DA Davidson. With our entry into the field of (Apple) and (Amazon), the situation may change slightly. ”
He added, “Apple will be affected, and there is not much that she can do to avoid the effect of customs duties. As for (Amazon), it suffers from a greater disturbance in the retail sector, given that many of its merchants are in China.
Although the Trump administration has excluded electronics from customs duties so far, Washington has hinted that some fees can be imposed in the coming weeks. Reuters reported that Apple is seeking to alleviate the effects of customs duties by transferring the production of (iPhone) phones directed to the United States to India, but it may maintain price increases at the minimum to avoid losing its market share, and will have to bear any additional costs.
Reuters added that some third -party merchants on Amazon, who sell Chinese -made goods during major shopping activities in July, are planning to stop working this year to protect profit margins.
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“Samsung”, which manufactures smartphones and chips used in it, is a more cautious position, saying: “The uncertainty about demand is increasing in the second half of the year as a result of recent changes in customs duties policies of major countries.”
The company “Qualcomm”, a designer of mobile phones, expected on Wednesday that the revenues of the third quarter will be less than estimates, due to the impact of customs duties, knowing that “Apple” is the largest “Qualcomm” customer.
On the other hand, Microsoft announced on Wednesday an increase of 33 percent in its cloud business revenues via the “Azur” platform, superior to expectations, and expected an acceleration in growth. Alphabet also announced last week an increase of 8.5 percent in its advertising sales, driven by integrating artificial intelligence into Google’s research, which made it more attractive to advertisers.
In turn, the company “Mita” exceeded the parent company “Facebook”, revenue expectations on Wednesday thanks to its strong advertising sales. On the other hand, the company “Snap”, the smaller competition for “Mita”, said on Tuesday that it will not issue a quarterly expectations due to the state of economic uncertainty, as advertisers prefer the largest platforms in difficult times.
The shares of “Microsoft” jumped by more than 8 percent in pre -market trading, while Meta shares increased by 6.4 percent. While Qualcomm shares decreased by 5.4 percent, while the shares of artificial intelligence suppliers such as “Inviteia”, “Advanz Micro Device” and “Broadcast” increased by more than 3 percent for each of them.
“During the month of April, the demand indicators in all our commercial business remained constant, including in (LinkedIn), games, and research,” Amy Hood, Microsoft’s financial director, told analysts.
Some analysts considered that the strong results of “Microsoft” indicate that concerns about the possibility that technological companies have added an excessive capacity to data centers to support the demand for artificial intelligence may have been exaggerated. Microsoft, whose shares decreased by 6 percent this year, were under pressure after analysts reported that it had canceled some contracts for data centers, which may indicate a surplus in the offer.
But on Wednesday, the company announced that the contribution of artificial intelligence to the growth of “Azur” increased to 16 percentage points in the third quarter of March, compared to 13 percentage points in the previous three months.
“The great improvement in the contribution of artificial intelligence shows the great potential of this technology as soon as the capacity is available.”
“Microsoft”, which plans to spend $ 80 billion on the artificial intelligence infrastructure in the current fiscal year, warned that it is still suffering from a shortage of supply, which reflects the comments of the company “Alphabet”.
She added, “We were hoping to achieve balance (in the capacity of the cloud) by the end of the fourth quarter. We have seen some increase in demand, as you have seen during the quarter, so we will face a slight and narrow shortage at the end of the year, but we feel optimistic about it.
