As the curtain rises on another earnings season, all eyes are on the Magnificent Seven of mega-cap tech firms, with a special focus on their handling of artificial intelligence (AI) initiatives. Investors, seeking signs of resilience amid recent market volatility, anticipate the upcoming reports to be pivotal moments.
Tesla (April 23): Investors are bracing themselves for Tesla’s earnings report amidst concerns over various challenges facing Elon Musk’s company. Analysts remain cautiously optimistic despite a downturn in vehicle sales and other issues, focusing on Musk’s ability to address key issues during the earnings call, such as developments in China, growth plans, and AI strategies.
Alphabet (April 23): Bank of America expresses bullish sentiment towards Google’s parent company, highlighting the potential for growth in YouTube and search results. Despite acknowledging the long-term competitive risks associated with AI, the bank remains optimistic about potential monetization improvements in the coming years.
Meta (April 24): Meta’s recent launch of the Llama 3 chatbot showcases its ongoing AI advancements. Analysts foresee a potential growth slowdown for the company but emphasise Meta’s strong positioning in leveraging AI within its advertising framework, signalling a positive outlook for growth.
Microsoft (April 25): Microsoft emerges as a significant player in the AI arena, with plans to triple its GPU count by 2024. Bank of America anticipates strong earnings driven by the Azure and Microsoft 365 segments, reflecting the company’s robust performance in the AI sector and projecting a potential upside for investors.
Amazon (April 30): Analysts continue to rank Amazon as a top pick despite its widespread ownership across coverage. Expectations are high for Amazon Web Services (AWS) to deliver positive results, driven by optimisations, new workload deployment, and early GenAI monetization, highlighting AWS’s potential for accelerated growth.
As Wall Street braces for this earnings season, the performance of these mega-cap tech firms, particularly in the realm of AI, will likely set the tone for market sentiment and investor confidence in the months ahead.
