The 'Big 3' Tech Playbook: Why Apple, Amazon And Microsoft Keep Winning

Evercore ISI analysts maintain Outperform ratings for Amazon, Apple, and Microsoft, forecasting strong upcoming quarterly performances. Amazon is expected to deliver a modest Q3 beat, driven by robust AWS growth, resilient retail, and strong advertising momentum (PT $280). Apple is positioned for a solid quarter, benefiting from surging iPhone 17 demand and double-digit Services revenue growth (PT $290), while Microsoft's strong fiscal Q1 is forecast due to accelerating Azure momentum and AI leadership, despite elevated capital expenditures for data centers (PT $625).

Analysis

Evercore ISI analysts maintain Outperform ratings across Amazon, Apple, and Microsoft, signaling a strongly positive outlook for these tech giants' upcoming quarterly performances. Amazon is projected for a modest third-quarter beat with estimated revenue of $178 billion and operating income of $19.5 billion, driven by robust AWS growth, resilient retail, and strong advertising momentum. Apple is anticipated to deliver a strong quarter, fueled by surging iPhone 17 demand and double-digit Services revenue growth, with gross margins expected between 46% and 47%. Microsoft is set for a strong fiscal first quarter, propelled by accelerating Azure momentum and AI leadership, despite elevated capital expenditures.

Amazon's AWS revenue is forecast to grow 18% year-over-year, with North American retail revenue reaching $104.7 billion (+10% YoY) and International retail at $41.2 billion (+15%). The company's automation in fulfillment centers is expected to yield cost efficiencies, while Prime Same-Day grocery delivery aims to enhance customer engagement. Apple's iPhone 17 demand is notably strong, with 59% of surveyed consumers planning to upgrade, significantly above the historical 45% average, contributing to an expected 8.6% sequential revenue growth.

Microsoft's Azure growth is expected to surpass company guidance, with AI emerging as a primary catalyst for its strong performance. However, capacity constraints in AI infrastructure could limit short-term upside, necessitating elevated capital expenditures for data center expansion, which are expected to moderate post-fiscal 2025. The upcoming earnings call will likely highlight the OpenAI partnership and Copilot adoption, underscoring Microsoft's strategic focus on AI integration and enterprise cloud migration.

Key Decisions for Investors

• Monitor Amazon's AWS margin normalization and the financial impact of Prime Same-Day grocery delivery for long-term efficiency and customer engagement.
• Evaluate Apple's sustained iPhone 17 demand and Services segment growth, particularly the App Store strength, as key indicators for continued revenue momentum.
• Assess Microsoft's AI capacity constraints and capital expenditure trajectory, alongside the progress of Copilot adoption and OpenAI partnership, for insights into its long-term growth sustainability.