Big Tech Faces the Earnings Test

Big Tech Faces the Earnings Test

AI, cloud and record investment: Big Tech earnings could determine the Nasdaq’s next direction.

Earnings season is entering its most delicate phase. Between July 22 and early August, some of the companies with the greatest weight in US equity indices—including Alphabet, Microsoft, Meta, Apple and Amazon—will release their results.

This time, beating revenue and earnings forecasts may not be enough. Following massive investments in artificial intelligence, the market wants to see tangible results: cloud growth, monetisation of new services, resilient margins and credible returns on spending for data centres and semiconductors.

Volatility could therefore increase not only in individual stocks, but across the entire Nasdaq 100.

Calendar of the Main Earnings Releases

All the dates listed refer to results scheduled for release after the Wall Street close, unless subsequently changed by the companies.

Alphabet has confirmed its conference call for July 22 at 4:30 p.m. New York time. Meta and Microsoft will report on July 29, followed by Apple and Amazon on July 30. AMD has scheduled its earnings release for August 4.

Alphabet Opens the Artificial Intelligence Test

Alphabet will provide one of the first decisive tests. Expectations are focused on Google’s ability to integrate artificial intelligence into Search without reducing the profitability of its traditional advertising business.

The market will pay particular attention to Google Cloud growth, the monetisation of AI features and infrastructure spending. Revenue growth accompanied by investment far above expectations could trigger a negative reaction, even if earnings exceed forecasts.

Conversely, accelerating cloud growth, solid margins and positive indications regarding demand for computing capacity could support Alphabet and, given its market capitalisation, the broader Nasdaq 100.

Tesla Between Cars, Robotaxis and Cash Flow

Tesla’s delivery figures have already provided an indication of automotive demand. Attention will therefore shift to margins, pricing policies and the company’s ability to finance its most ambitious projects.

The market will look for updates on the robotaxi service, autonomous driving technology and the Optimus humanoid robot. Expectations point to quarterly revenue of approximately $26–27 billion, but elevated investment could place pressure on free cash flow.

Convincing margin guidance and concrete timelines for new projects could support a recovery in the stock. Further delays or spending above expectations could instead outweigh otherwise positive operating results.

Microsoft, Meta and Amazon: Is AI Paying Off?

The following week will be even more important for the Nasdaq.

Microsoft will have to demonstrate that Azure’s growth and Copilot adoption are offsetting the costs of building data centres and purchasing computing capacity. The decisive factor will not be cloud growth alone, but the relationship between new AI revenue, margins and investment.

For Meta, the market will assess whether artificial intelligence is improving content selection and advertising returns. Strong advertising revenue growth could be neutralised by an excessive increase in spending forecasts.

Amazon will be judged primarily on AWS growth and its e-commerce margins. Accelerating cloud growth accompanied by solid guidance would have positive implications not only for Amazon shares, but for the entire AI infrastructure industry.

Apple Seeks an Answer on AI

Apple enters its earnings release facing a different set of questions. In addition to iPhone sales and conditions in the Chinese market, investors will look for indications that the company can turn its AI features into a new device replacement cycle.

Services growth will continue to provide an important source of stability. However, weak iPhone demand or cautious commentary regarding China could outweigh any improvement in margins.

To generate a clearly positive reaction, Apple may need to combine better-than-expected results with concrete signs of accelerating progress in artificial intelligence.

Semiconductors Between Record Demand and Rising Costs

Intel, AMD and later Nvidia will complete the technology-sector picture.

TSMC’s recent results confirmed very strong demand for chips intended for AI applications, but also highlighted how rapidly manufacturing investment is increasing. TSMC raised its annual capital expenditure forecast to $60–64 billion, despite strong quarterly earnings growth.

For AMD, growth in Instinct accelerators and server CPUs will be decisive. Intel, meanwhile, will need to convince the market about technological progress at its manufacturing facilities and its ability to secure new external foundry customers.

Nvidia will remain the final test for the entire supply chain. Expectations are elevated, creating the possibility of a negative reaction even if results exceed consensus forecasts, should guidance, margins or delivery times fail to improve sufficiently.

Possible Market Reactions

The most favourable scenario would involve continued robust growth in cloud computing, digital advertising and data centres, accompanied by stable margins. In that case, the Nasdaq 100 could break through its current resistance levels and move back towards its previous highs.

The intermediate scenario is probably the most challenging: better-than-expected results combined with cautious guidance and investment that continues to rise sharply. The market could reward some companies while penalising others, producing significant volatility without establishing a clear direction for the index.

A negative scenario would emerge if several companies simultaneously reported:

• slowing cloud demand;

• weaker monetisation of AI services;

• pressure on margins;

• investment above forecasts;

• longer timelines for achieving economic returns.

In that event, the correction could spread across the entire technology sector because it would challenge the main narrative supporting current valuations: artificial intelligence’s ability to generate profits proportionate to the capital being deployed.

An increase in volatility can therefore be expected in the very short term. The market will not automatically reward companies that beat estimates: guidance and the quality of growth will be particularly important. Following the sector’s strong expansion, expectations have become almost as significant an obstacle as the actual results.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice, a trading recommendation or a solicitation to buy or sell financial instruments. The forecasts presented are subject to uncertainty and may not materialise. Earnings dates may be changed by the companies.