In recent weeks, the earnings announcements of tech giants such as Alphabet, Meta, Microsoft, and Tesla have exceeded expectations. This has been particularly evident since the S&P 500 index has seen small gains in recent times. These companies are set to announce their results next week, with high hopes from investors.
Last week’s performance of the S&P 500 index was its worst in over a year, with even Nvidia, considered one of the world’s most important stocks by Goldman Sachs, falling over ten percent. Despite this setback, investors who have invested in the top seven tech companies can still expect positive results. Bloomberg data indicates that the combined operating profits of these companies are expected to increase by 38 percent compared to the same period last year. However, not all results will be revealed next week as Nvidia will announce its results a month later.
Tech companies are facing increasing demands from investors, especially those in artificial intelligence like Nvidia. Meta has seen a 36 percent increase in its share price this year while other companies set to announce their results next week have shown weaker performances. For instance, Alphabet’s share price has increased by 10 percent while Microsoft has risen by only 6 percent and Tesla’s share value has dropped by over 40 percent.
Meta is expected to see a 26 percent increase in revenue this quarter thanks to investments in AI for better personalization in advertisements and content delivery. Microsoft is also expected to benefit from AI with its Copilot AI system integrated into Office systems. Big tech companies play a pivotal role in the S&P 500 index and globally with last year’s massive growth impacting this year’s results. As expectations remain high for these companies any disappointing results during earnings season could lead to minor setbacks but not major price drops unless future prospects are severely affected.
In conclusion, while there may be some volatility in stock prices during earnings season for big tech giants such as Alphabet and Tesla, overall investors should remain optimistic about their long-term returns on investment due to these companies’ continued growth potential and market demand for their products and services.
