Trending tickers: Amazon, Tesla, Samsung, Mercedes-Benz, Whitbread

The Amazon logo is seen at the company's logistics centre in Boves, France, February 11, 2022. REUTERS/Pascal Rossignol
Amazon is set to report earnings after the bell on Tuesday. (REUTERS / Reuters)

E-commerce firm Amazon is set to report earnings after the bell on Tuesday in what will be a closely watched quarter for tech companies' progress in the AI sector.

Analysts on Wall Street expect revenue of $142.6bn (£113.8bn) versus the $127.4bn in the same quarter last year. Adjusted earnings per share are predicted at $0.82, more than double the $0.31 in Q1 2023.

Meanwhile, online stores, Amazon Web Services and advertising are all expected to have grown.

The company has said it sees the potential for AI initiatives to generate tens of billions of dollars for its cloud business.

CEO Andy Jassy said in an annual letter to shareholders earlier this month: "Generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the Internet."

Read more: Amazon earnings preview: AI initiatives expected to take focus

Like its competitors Microsoft (MSFT) and Alphabet (GOOG), Amazon is wielding its heft in its cloud computing business to gain an edge in the nascent AI market. AI tools require huge amounts of data and processing power to train and run large language models and their applications, relying on cloud providers to supply vital infrastructure.

Similar to other deals between tech giants and AI-focused companies, Amazon's partnership with Anthropic comes with a commitment to use its cloud computing services — highlighting an advantage of trillion-dollar companies as they attempt to dominate the coming AI era.

Tesla stock finished more than 15% higher on Monday ahead of news that CEO Elon Musk has reportedly shaken up its top ranks and set layoffs in motion. According to a report by The Information, which saw internal documents, Rebecca Tinucci, senior director of the electric vehicle maker's Supercharger business, and Daniel Ho, head of new products are set to leave.

Meanwhile all employees that report to Ho and Tinucci will be laid off, the report added.

The news comes following reports that the company has clinched key approvals in China to introduce the company's self-driving software to the market.

Reuters reported on Monday, citing two sources, that, Tesla had reached an agreement with Baidu (BIDU) to use the Chinese tech firm's mapping license for data collection on China's public roads.

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The collection and storage of Chinese data, and how much of it is allowed back into the US has been a key concern for years with the interaction of US companies on Chinese soil, or visa versa.

Musk is looking to obtain approval to transfer data collected in the country abroad to train algorithms for its autonomous driving technologies, a source told Reuters.

Electronics firm Samsung beat earnings estimates as its chip division returned to profit, reporting a net income for that division of 6.62 trillion won ($4.8bn) in the quarter to the end of March, versus the average analyst projection for 5.63 trillion won. It more than quadrupled its earnings from a year earlier off the back of the AI boom.

Read more: HSBC beats estimates and announces buyback as CEO retires unexpectedly

The company's fortunes have been buffeted by macroeconomic uncertainty in recent years, with heavy losses in 2023 in its semiconductor unit. However, demand for chips is higher than ever, with the rise of companies hoping to cash in on the wave of AI innovation which has been led by the likes of OpenAI.

Samsung said it expects chip demand to remain strong in the current quarter and the second half of this year.

Luxury carmaker Mercedes-Benz left its guidance unchanged for the year and said it would continue share buybacks as its earnings dropped 34% in the first quarter.

Poor demand for electric vehicles was behind the lag, with earnings before interest and tax dropping to $3.9bn.

The company expects an increase in sales in the coming quarters, with an improvement in the Chinese market.

Whitbread stock gained more than 1% in early trade in London on Tuesday as the Premier Inn owner announced it would close restaurant chains and cut 1,500 jobs. Whitbread will sell 126 of its less profitable branded restaurants, while job cuts are still being decided with a consultation process having been launched.

The closures come in favour of building more hotel rooms, the company said. The latest results show pre-tax profit rose 21% to £452m for the year ending 29 February.

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