(Yahoo! Finance) - Some of the biggest names in tech, including Meta (META), Microsoft (MSFT), and Apple (AAPL), will be reporting earnings the week of Jan 26. Yahoo Finance Tech Editor Dan Howley shares some of the things he will be watching for.
Video Transcript
So let's get to our tech editor Dan Howley. Of course, he is looking ahead to many of these numbers. Hey Dan, let's talk about Microsoft first of all. Um because, you know, we're going to be looking to AI effects, we're going to be looking to Azure. What should people be watching for in those numbers?
Yeah, I think those are really going to be obviously the the main drivers for for Microsoft. Uh it's been that way for for a few quarters now. Uh the AI impact on Azure. Microsoft used to list that actually, how much uh percentage of revenue growth they saw as a result of AI, but they don't do that any longer. Uh I think it's just a result of the fact that the AI continues to drive a a good chunk of growth. so they figured we don't really have to include that anymore. Um but it was a a helpful stat, just helping people figure out how much AI is really impacting the overall revenue stream for the company. But, you know, we're we're going to be looking at how much Azure growth, uh how much Azure has grown uh in the quarter year over year just uh as a result of the increased demand from users. We also want to know from Microsoft what the capacity constraints are like. They've said that despite building out these data centers, they're still capacity constrained, which is putting limits on how much they can see growth out of Azure uh and the the cloud business overall. And so, if we can get a sense on what that's that that kind of looks like, how the buildout is continuing, when they may no longer be capacity constrained. I think that will be really important to a lot of investors. And then obviously, the uh Microsoft Windows side of things, what that looks like, you know, obviously PC sales, not as important to to Microsoft as they once were in years past, uh but still a good chunk of the business. uh and there was supposed to be a huge jump in in PC sales. We saw Gartner say that uh sales had increased uh for the year, uh 2025. Uh but what does that mean then for Microsoft when it comes to Windows in the prior quarter.
01:52 Speaker A
And the same afternoon that we get Microsoft, which is Wednesday after the bell, we're also going to be getting meta numbers, Dan. Um, you know, something I'm curious about that we didn't mention just now with Microsoft, but, you know, we have the big spending plans from all of these companies. Are we expecting to get any kind of update on those plans or are they pretty much going to hold steady?
02:14 Speaker B
Yeah, I mean, this is kind of where we're supposed to get meta's uh layout for spending for the year. They had previously said that they expect to see spending increased from 2025, you know, tens of billions of dollars, uh for, you know, Microsoft, Google, uh Amazon, uh and meta. Uh meta hopefully we'll get a number from them, uh for the the overall year. Uh we know that they continue to do this build out. We know that they are, you know, continuing to buy these GPUs, but it's not just the GPUs, it's obviously the networking, the servers, uh the buildings themselves. Um, you know, and so we're hoping to learn more about what that looks like for them. And then how investors react to that, right? Because everybody wants to to say that they have AI, everybody wants to have the revenue or revenue potential for for AI, but you got to spend a lot of money to make money. and Meta certainly has been the one spending a lot of money. Uh I think it'll also be interesting to see what reality labs is like at this point. They had those layoffs. Um, you know, they're cutting back on that metaverse division and then moving some of those savings over to the uh wearables division. you know, are they seeing increased uh revenue from there? What what what do the losses look like? I mean, obviously, we're not expecting reality labs to be cash flow positive, but, you know, have there been any changes uh over the last few months with regards to what what that spending looks like for them in particular.
