Tech Companies Expected To Post Strong Earnings This Week

Earnings season continues with reports from several tech giants, including Alphabet—one of the "Magnificent Seven"—along with IBM and Intel, as the artificial intelligence arms race intensifies.

Tech stocks have propelled the Nasdaq to fresh highs in recent weeks. I Photo: IBM

Like its Big Tech peers, Alphabet is investing billions into AI infrastructure, even as AI technologies begin to threaten its core search business, Barron’s Daily's Liz Moyer reported.

Despite concerns, Google’s search demand likely remained strong, according to Truist analyst Youssef Squali. Alphabet is also expected to post solid results from YouTube and its cloud operations. “It’s still Google’s war to lose,” said Squali.

However, Bank of America analysts have warned that AI chatbots such as OpenAI’s ChatGPT and Anthropic’s Claude are giving users alternative ways to search for information—posing an existential challenge to Alphabet.

The company is also facing intensifying antitrust scrutiny.

Still, some analysts remain optimistic, citing Alphabet’s entrenched relationships with publishers, its robust advertising business, and underappreciated segments like its cloud division and autonomous driving arm, Waymo, MarketWatch reported.

Tech stocks have propelled the Nasdaq to fresh highs in recent weeks.

Michael Arone, chief investment strategist at State Street Investment Management, said he expects most companies to beat earnings expectations and forecast second-quarter earnings growth of around 9% year-over-year.

Analyst expectations have been rising—S&P 500 earnings were projected to rise 4.9% in Q2 as of late June, but that estimate climbed to 5.6% last week, according to FactSet.