Upcoming tech earnings to test AI spending and chip demand
Second-quarter results from the largest technology companies will reveal whether massive artificial intelligence investments are translating into sustainable revenue growth.
Alphabet and Intel will open the second-quarter earnings season for the technology sector on July 22 and 23, followed by Microsoft, Meta, Amazon, Apple, and major chipmakers.
The central focus for investors will be the balance between capital expenditures on artificial intelligence infrastructure and the resulting financial returns. Microsoft and Meta have recently seen their shares decline due to heavy investments in AI data center capacity. To reassure Wall Street, Microsoft must detail the expansion of its Copilot service and AI growth on Azure, while Meta needs to demonstrate how AI is driving advertising sales and user engagement.
Alphabet and Amazon have so far avoided similar market punishment, but they will need to maintain that trajectory by proving they can control spending. Analysts will scrutinize the remaining performance obligations, or RPOs, of these hyperscalers. This metric represents signed contracts that have not yet generated revenue, offering a critical forward-looking indicator of growth.
Chip demand under scrutiny
Semiconductor companies face a different set of expectations. Nvidia, Intel, AMD, and memory chip manufacturers must provide strong sales figures and forward guidance to prove that demand is accelerating. However, recent market behavior suggests that even robust results might trigger a "sell the news" reaction, as seen with Nvidia's previous reports.
Apple's margin pressures
Apple's results will hinge largely on iPhone sales, but the underlying commentary is expected to carry equal weight. Investors will analyze whether current purchases are driven by consumers rushing to buy ahead of potential price increases, or if they are delaying spending in anticipation of a rumored foldable iPhone launching this autumn.
Furthermore, the market will be looking for specifics on how rising memory and storage costs are affecting Apple's profit margins. This cost pressure will likely influence future device pricing strategies.
