Big Tech Goes to the Earnings Witness Stand
If this week’s earnings season has a main event, it is the parade of Magnificent Seven reports due Wednesday and Thursday. Alphabet, Amazon, Meta Platforms, and Microsoft all report after Wednesday’s close, with Apple following Thursday evening. Together they will provide the first comprehensive read on how AI spending is holding up and whether it is actually translating into revenue. The bar is genuinely high. Alphabet’s cloud segment grew revenue by 48% in the fourth quarter of 2025, accelerating from 34% the quarter before. Analysts expect that trend to extend into Q1 2026, with cloud revenue growth likely landing in a similar range and search revenue growth coming in between 17% and 18%. Alphabet has also reiterated capex plans of $175 billion to $185 billion for the year, so the focus will be on monetization of that spend rather than the headline number itself. It is also worth noting that roughly 75% of code written at Google is now AI-generated, up from 25% a year ago. For the broader group, the expectations are substantial. Q2 2026 earnings growth across the S&P 500 is currently forecast at nearly 20% on 9.5% higher revenues, and the tech sector has been the primary driver pulling those estimates higher over the past year. Dan Ives of Wedbush called this “a monster week for Big Tech earnings,” adding that the AI Revolution is “steamrolling ahead.” Of course, with shares of Alphabet, Amazon, Meta, and Microsoft each up more than 10% this month heading into results, the market has already priced in a lot of good news. Any stumble in guidance or capex discipline will be met harshly.
