Tech giants offer upbeat forecasts despite US trade tensions

Some of the world’s top tech firms, including US search giant Alphabet, South Korean chipmaker SK Hynix and Indian IT services provider Infosys, have provided upbeat guidance in their latest earnings reports, shrugging off an uncertain US trade policy.

Corporate operations have been overshadowed by erratic US trade action that has upended supply chains and left firms to navigate fluid tariffs on top of broader economic uncertainties such as regulatory change and currency fluctuation.

But tech titans Alphabet (GOOGL.O), SK Hynix (000660.KS) and Infosys (INFY.NS) – which all reported earnings that beat market forecasts – predicted brighter days to come, with Alphabet and SK Hynix both flagging plans to boost spending.

Nvidia (NVDA.O) supplier SK Hynix booked record quarterly profit, boosted by strong demand for artificial intelligence chips and customers stockpiling ahead of potential US tariffs.

Indian IT services provider Infosys raised the floor of its annual revenue forecast range to 1 per cent to 3 per cent, from flat to 3 per cent, matching analyst expectations.

In Europe, Swiss drugmaker Roche (ROG.S) reported a better-than-expected first-half operating profit on Thursday and said it is in close contact with the US government on tariffs. It said it has ramped up inventories in the United States in case tariffs do come into effect to avoid any initial impact.

“We hope that the US government then also sees with all the investments that we and other companies are making, that the companies are intending to produce the medicines that are needed in the US for the US also in locations in the US,” said CEO Thomas Schinecker.

Nestle (NESN.S), the world’s biggest packaged food company, also on Thursday posted better-than-expected first-half organic sales growth and maintained its 2025 outlook.

TURBULENCE

The upbeat earnings and guidance amounted to a bright spot in a turbulent second-quarter earnings season that has seen businesses as varied as chipmakers and steelmakers report downbeat results.

Companies have reported over July 16-22 a combined full-year loss of as much as $7.8 billion, with the automotive, aerospace and pharmaceutical sectors being hurt most by tariffs.

South Korea’s Hyundai Motor (005380.KS) on Thursday posted a 16 per cent decline in second-quarter operating profit as US tariffs on vehicles and parts started to weigh on its bottom line.

The automaker said US tariffs cost it 828 billion won ($606.5 million) in the second quarter and that it expects tariffs to have a bigger impact in the current quarter.

General Motors (GM.N) said tariffs knocked $1.1 billion from second-quarter earnings.

On Wednesday, Tesla (TSLA.O) Chief Executive Elon Musk said US government cuts in support for electric vehicle makers could lead to a “few rough quarters”, as his firm reported its worst quarterly sales decline in over a decade.

TRADE DEALS

News that the US had struck a deal with Japan to lower new tariffs on auto imports and spare it punishing levies on other goods lifted stock markets on Wednesday. It stirred hope for a similar deal with the European Union ahead of August 1, when the US said new tariffs will go into effect.

The European Union is moving toward a trade deal that could include a 15 per cent US baseline tariff on EU goods and possible exemptions, two European diplomats said.

One surprise on Thursday was South Korea’s finance ministry saying tariff negotiations had been postponed due to a scheduling conflict for US Treasury Secretary Scott Bessent.

The announcement cast doubt about whether South Korea would be able to avert US import duties that could hit some of its major exporting industries.

All eyes are on Washington as governments scramble to close trade deals ahead of next week’s deadline that the White House has already pushed back under pressure from markets and intense lobbying by industry.

While the Japan deal has eased investor worry, the threat of higher tariffs on other large economies remains, including the European Union, Canada and Brazil.

An EU-China summit on Thursday will test European resolve and unity as the bloc faces trade pressure from both China as well as the United States, while US Treasury Secretary Scott Bessent meets Chinese officials in Sweden next week.