Citi, BofA, and UBS Bet on These 3 Earnings Themes: Which Side Are You On?
Big tech earnings are around the corner! Let’s see how institutions focus on this earnings season!
Citi: S&P 500 Q1 earnings growth is expected at +13.1% YoY, with the tech sector taking the lead.
Tech earnings growth forecast: +45%, highest across all sectors
Positive surprise probability: 90%, leading the second place (consumer staples at 70%) by 20 percentage points
Overall Q1 beat rate: 62%, the second-highest quarter since 2022
Three key themes wall street is betting on: will earnings season validate them?
📌 AI Cloud ( $Microsoft(MSFT)$ / $Alphabet(GOOG)$ )
Citi:
Azure Q3 expected at +39% cc, 1pp above company guidance . FY27 expected at 41% vs consensus 37%
Google Cloud +57.5% vs consensus +46.8% (11pp gap) ; Gemini MAU at 750M, Q1 DAU +268% YoY
Morgan Stanley:
MSFT price target $650 (vs current $423, +54% upside) ; Copilot paid seats at 15M; RPO +110% YoY to $625B
📌 Semiconductors
UBS:
$Philadelphia Semiconductor Index(SOX)$ up 20% in the past month, a move seen only 4 times in the past 5 years
$Taiwan Semiconductor Manufacturing(TSM)$ capex projected at $75B in 2027 and $85B in 2028
📌 AI Infrastructure
Citi:
AI server spending +70% YoY in 2026E; Non-AI server spending revised up from +7% to +50%
BofA:
Sees a $5.5 trillion AI infrastructure opportunity. The real opportunity is not chips, but power grids, cooling water, and transformers
⚠️ After software surged +13.6% in a single week (the biggest gain in a decade), Morgan Stanley warned that this rally is likely to fade.
What’s Your Take on This Earnings Season?
AI Cloud: After massive capex, are Azure / AWS growth rates truly inflecting?
Ads: Is Google search ad recovery real, or just a low-base effect?
Semiconductors: With model diversification, is NVIDIA’s CUDA moat still intact?
Consumer Electronics: Will iPhone China + Services show a real rebound this quarter?
Quick Poll: Which Theme Do You Buy Most This Earnings Season?
A. AI Cloud acceleration
B. Ad recovery
C. Semiconductors / AI infrastructure
D. Consumer electronics rebound
Drop your choice in the comments and win tiger coins!
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AI Semiconductors' growth rate in 2025/2026 is 65% to 75%. This is due to extreme demand for Blackwell/Rubin GPUs, custom ASICs & High Bandwidth Memory (HBM).
AI Cloud Services' growth rate is 24% to 50% as enterprises are moving from AI pilots to full production workloads across Azure, AWS & Google Cloud.
So I would dollar cost average $NVIDIA(NVDA)$ as it has a dominant share of 86% to 90% of the AI data centre market.
With gross margins at an amazing 71 to 75%, NVIDIA operates with a level of pricing power that its competitors find hard to match.
I like NVIDIA's dominant margins, proven software moat & strong earnings. It is my top choice to capture this fantastic growth.
@Tiger_comments @TigerStars @Tiger_SG
In Q4 2025, Google's ad revenue jumped 14% YoY to USD 82.3 billion, marking the strongest quarter in its history. This has followed a steady acceleration throughout the year - from 8.5% in Q1 25 to 14% in Q4, suggesting that the growth is sustained rather than a one time bounce.
Google's 2025 annual revenue surpassed USD 400 billion for the first time, with search ad revenue growing 11.5% in Q2 25, outperforming analyst forecast of 7.8%.
Contrary to fears that AI would cannibalise clicks, AI Overviews & AI mode have driven search usage to record levels.
Users are performing longer, more complex queries, which Google is successfully monetising by expanding the search funnel.
@Tiger_comments @TigerStars @Tiger_SG
Most developers are trained on CUDA & its documentation & community support are 10x to 20x larger than any alternative.
CUDA has a flywheel which CEO Jensen Huang describes as a seif sustaining cycle where a massive installed base of hundreds of millions of GPUs attract developers, leading to software breakthroughs that further drive hardware sales.
With over 20 years track record, Nvidia has built optimised libraries such as cuDNN, TensorRT that are deeply embedded in production code. Changing this pipeline on other hardware introduces significant operational risk & cost.
NVIDIA also has a full stack strategy, positioning its Vera Rubin platform & NVLink networking as integrated AI Factories which competitors often struggle to match.
@Tiger_comments @TigerStars @Tiger_SG
$Amazon.com(AMZN)$ AWS's growth has surged 24% YoY to USD 35.6 billion in Q4 25. This is the fastest growth rate in 13 quarters. It is a sharp acceleration from 17% seen in 2024 & 20% in Q3 25.
$Microsoft(MSFT)$ Azure maintained a high growth rate of 39%. AI services now represent a significant portion of this growth, contributing 16% to Azure's total growth as of late 2025.
$Alphabet(GOOG)$ Google Cloud is the most explosive growth among the 3, reaching 48% YoY in Q4 25.
This growth inflection is tied to the physical capacity from 2025 heavy capex. Demand currently exceeds supply. Growth rates are capped by how fast they can install new hardware.
For 2026, the Big 3 have a combined USD 555B in Capex.
@Tiger_comments @TigerStars @Tiger_SG
Azure Q3 expected at +39% cc, 1pp above company guidance . FY27 expected at 41% vs consensus 37%
Google Cloud +57.5% vs consensus +46.8% (11pp gap) ; Gemini MAU at 750M, Q1 DAU +268% YoY
NVIDIA still leads. CUDA remains deeply embedded, and near-term demand > supply. Custom chips are a long-term threat, not immediate.
AI Cloud: Microsoft Azure and Amazon AWS should improve, but growth is still capex-driven. Margins matter more than headline growth.
Ads: Google recovery looks partly base effect. Real test is sustained search demand amid AI disruption.
Consumer: Apple may struggle. China remains soft; Services helps but may not fully offset hardware weakness.
View: AI infra is the only clear, durable earnings engine this season.