All eyes on Big Tech this week: 5 quarterly figures will be crucial

After a strong start to the week in the financial markets, helped by the sharp fall in oil prices, attention is now shifting completely to the quarterly figures of the largest technology companies in the world. 

The results come at an exciting time. Last week, Alphabet proved that even excellent numbers are no longer enough to satisfy investors. Now it's the turn of Microsoft, Meta, Apple, Amazon and SK Hynix to show that the billions invested in artificial intelligence (AI) are starting to pay back.

The tone was set last week by Alphabet. Google's parent company exceeded expectations with strong revenue growth and an 82 percent growth in its cloud division. Still, the stock got a tap of about 7 percent.

Investors mainly focused on the sharp increase in AI spending. Alphabet increased its investment budget again and also reported a negative free cash flow for the first time since the IPO. The huge investments in data centers, chips and AI infrastructure raise the question of when these expenditures will actually lead to higher profits.

That is precisely why investors will take an extra critical look at the figures this week from Microsoft and Meta, two companies that are also investing tens to hundreds of billions of dollars in AI.

The figures also appear in the week of the US Federal Reserve's interest rate decision. This decision awaits us on Wednesday. 

Although the easing of tensions in the Middle East caused the oil price to fall again by more than 7 percent and thus provided relief on the stock market, the combination of business results and monetary policy could cause significant price movements this week.

Microsoft and Meta will open the busiest part of the earnings season on Wednesday. Analysts expect Microsoft to increase its investment budget to about $238 billion by 2026. With this, the company wants to maintain its leading position in the field of AI, but investors will mainly want to see whether the rising costs are compensated by further growth of cloud activities and AI services.

Meta is also given a difficult task. The group is investing aggressively in AI, but investors are increasingly questioning whether that spending will yield sufficient returns. After the impressive performance of Google Cloud, Wall Street will want to see that Meta also knows how to convert its own AI strategy into strong revenue and profit growth.

Apple will present its quarterly results on Thursday, together with Amazon. Apple's presentation gets an extra special touch, as it will be Tim Cook's last earnings call as Apple's CEO.

According to analysts, the turnover comes to about 108.9 billion dollars. Unlike many competitors, Apple opts for a relatively cautious AI strategy. The company invests less aggressively in huge AI infrastructure and mainly tries to make existing products smarter.

This approach seems to give investors confidence for the time being. Earlier this month, the stock hit a record closing price of $333.

Get notified instantly as soon as Microsoft, Apple, and Meta publish their numbers. Download the free Newsbit app.

The first key figures will appear as early as Tuesday, when South Korean memory chip manufacturer SK Hynix announces its results. These are the first quarterly figures since the successful Nasdaq listing.

Analysts expect sales of 84.1 trillion South Korean won (60 billion dollars), accounting for a record operating profit. Because SK Hynix is a major supplier of AI memory chips, the results can give an early signal about the demand for AI hardware.

Together with the quarterly figures of the US tech giants and the Federal Reserve's interest rate decision, it promises to be one of the most important stock market weeks of the year. Especially the question of whether the huge AI investments will finally be visible in the results will determine how investors look at Big Tech for the rest of the year.