Doug Clinton, Intelligent Alpha founder and CEO, joins 'Squawk Box' to preview Big Tech earnings this week, what investors can expect from the tech giants, and more.

New York

Several major technology companies are scheduled to report their earnings, following recent results from Google and Tesla. Meta is expected to be a focal point due to its significant investments in artificial intelligence, with analysts anticipating discussion on continued capital expenditures and the progress of Meta's AI models. Apple is also under scrutiny regarding its AI strategy and upcoming product launches, though analysts do not expect major announcements on proprietary AI models in the immediate term.

Amazon faces concerns about its top-line performance, with AI-driven models predicting a possible miss, though margins are expected to remain stable. Broader industry discussions include the impact of tariffs, inflation, and pricing strategies, with experts noting that tech companies are likely responding to political and market pressures without artificially suppressing prices. The performance and adoption of leading AI models, such as GPT, Gemini, and Claude, are also highlighted as key factors in the sector's outlook.

Big Tech earnings this week

After Google and Tesla's last week, more big tech companies are reporting this week. We'll hear from Microsoft. We'll also hear from Meta, Amazon and Apple. Join us right now on What to Expect. Doug Clinton is the founder and CEO of Intelligent Alpha. Good morning to you. Of those names, we can we can pick through them. I think a lot of folks are going to be focused on Apple. They'll also going to be focused on Meta, frankly, especially given all of the big investments that Mark Zuckerberg's been making in the world of A.I. Which one do you want to take first. Let's do Meta and we can start here. Andrew at Intelligent Alpha we use A.I. We use the large language A.I. models to make estimates for a thousand companies every single quarter to figure out whether A.I. thinks these companies will beat or miss earnings. Meta is one of the companies in the Mag 7 that our models expect to beat earnings. And it's also a stock that we own. I think to your point about sort of some of these investments that's going to be the big topic on the call is Mark Zuckerberg has just spent billions of dollars on talent to try to catch up in the A.I. frontier model race because clearly Lama is behind. It's a model that we don't even use as A.I. practitioners at our firm. And so I think that will be the highlight of the call. I would also expect them to talk about probably continued expenses in capex just like we heard Google who added another 10 billion to their capex estimates for this year. Let's let's go hit Apple because there's a lot of questions around Apple. There's a lot of questions right. Apple as it relates by the way to A.I. and whether they need to have a model whether Siri works well enough and what the new upgrade cycle might look like this coming fall. So our models think Apple in terms of earnings and will be fine this quarter. I think the reality though is the stock is still under question for all the reasons you just described. Right. What will they do in A.I. And the reality is we're not going to get very many answers this quarter. It's just not how Apple runs their sort of new product launches. And so for Apple the catalyst really is about what do they talk about in September with a new iPhone launch. Do they announce some new A.I. features that maybe can start to accelerate iPhone growth or maybe even the services growth if they build their own model. It seems pretty clear so far that they are going to be relying on third parties like GPT like Gemini from open A.I. and Google for the A.I. capabilities. And I think that that will just be an overhang on the stock for the next few months. Do you think it matters that they have their own LLM or not long term. I don't think it matters that much because if you look at sort of how they've run their services and things that are on device that are very popular it hasn't really mattered in the past. You know you look at Google Maps as an example or Google Search. I think they've been happy to partner with one of the best providers right where they create these services. Customers love using Google. And I think you're going to find the same things with LLM if they can just put GPT in the phone in a good way and maybe put some guardrails around it to make the consumer feel safe using it. Then I think that'd be good enough. One of the mega caps you don't own is Amazon. And that's because you do have some concerns around A.I. That's right. Becky our models for Amazon are concerned about the top line this quarter. And so our models are expecting a miss on the top line. We actually think the bottom line will be fine. So there may be some margin strength there. But the concern I think from our A.I. models is centered around just what do the tariffs mean. What have they done over the last quarter. And I think even more importantly you know as maybe some of these impacts start being felt we keep hearing I know we've talked about on the show earlier today. Keep hearing when will some of the inflation increases happen. That might be something that creeps up in Q3. And so our models are just concerned about that going into that quarter. In terms of we keep talking about the tariffs and inflation and everything else do you believe as our last guest did that actually companies and I wonder about tech companies in particular are keeping prices down to prevent the wrath if you will of the president. I think all these companies are certainly smart about how they're dealing with politics. You know I think we've seen in terms of the administration change from last year to this year. I think some of the tone at many of these companies have changed. But to your specific point about prices I don't know that they're doing much to really keep prices artificially low. I mean if you think about a Google if you think about a Meta you know they operate their businesses where there are efficient marketplaces. And so I think the prices of ads for example are really a reflection of what the advertisers think they can sell into the market. And so I don't think they're probably doing anything specific with prices. But certainly as they as they think about policy and how they run their businesses I think they've gotten a different mindset politically. Hey Doug you said llama. You guys don't even use it. Which which models do you use there. The three that we focus on Becky are GPT from open a.I. Gemini from Google and Claude from Anthropic. We do also use Grok. And in my opinion I mean those four are clearly the best models on the market. We've experimented with llama but it's just been it's been disappointing. And I don't think that's controversial even say given what Mark Zuckerberg is spending. He knows he needs to catch up.

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