NEW YORK: Five of the so-called Magnificent Seven tech megacaps will report earnings this week, with artificial-intelligence (AI) investment, regulatory challenges and waning China demand among the shared themes in focus.
Along with Microsoft Corp, which just hit a historic US$3 trillion market valuation, Alphabet Inc, Meta Platforms Inc and Amazon.com Inc are set to post record revenues for the quarter, underscoring the strength of the US economy.
Even so, they are likely to be asked about further cost reductions after the significant job cuts they have each embarked on in recent weeks.
Apple Inc, grappling with slowing China sales, antitrust accusations and bruised from a patent fight, could give investors a better sense of early demand for its new Vision Pro, which some big-name developers are steering clear of Boeing Co, mired deep in a safety crisis that prompted the US Federal Aviation Administration (FAA) to freeze a planned production increase of 737 Max, will face more questions about how it plans to allay concerns over the quality of its aircraft.
Microsoft is set to post a 16% jump to record quarterly sales, with TD Cowen seeing strength in its Azure segment from returning cloud customers and rising AI demand.
The monetisation of its AI-powered virtual assistant Copilot will be scrutinised though the product won’t make significant topline contributions until later this year, Evercore said.
Boeing will see operating profit of US$287mil, snapping a five-quarter streak of losses on more commercial-aircraft deliveries and strong services demand.
With its growth ambitions dented by the FAA’s move to freeze planned production increases for the 737 Max aircraft, executives are set to face intense scrutiny on the company’s next steps.
Apple may score a modest beat on earnings estimates despite slowing sales in China, Evercore said, noting that a patent dispute involving its smartwatches should have little impact.
Initial signs point to strong demand for the Vision Pro headset which, along with AI-driven features on its iPhones, could drive growth this year, Bank of America said.
Exxon Mobil has warned of a US$2.5bil writedown in some of its California operations in guidance released this month. Gas trading and downstream-derivative tailwinds shored up its profits. — Bloomberg
