All eyes on Big Tech

Cue the drumroll: With four members of the Magnificent Seven stepping up to report earnings over the next two days, the market is bracing for answers on growth, AI, and spending. Here’s one thing per company that investors should be watching when each member reports:

Apple: The AI question

Apple’s results will hinge on whether it signals a clearer direction on AI. Unlike peers, the company hasn’t framed itself as an AI leader, and its rollout of Apple Intelligence has been cautious. Investors will be listening for any shift in strategy or signs that AI will require meaningfully higher capital spending. At the same time, investors will be watching iPhone sales, after the company said in October it expects revenue to grow at a double-digit year over year pace.

Microsoft: Demand vs. supply

Microsoft’s quarter will be judged by Azure’s performance, but the bigger issue is capacity. Demand for AI-powered cloud services remains strong, yet chip shortages have limited how much Microsoft can deliver. Investors want to know whether those constraints are easing and whether enterprise AI tools like Microsoft 365 Copilot are gaining traction, all while the company keeps costs under control.

Meta: Capital spending

Meta’s earnings will center on capex, as the company continues to pour money into AI with limited visibility into near-term returns. Management raised its 2025 capital expenditure guidance in October to between $70 billion and $72 billion, even though Meta lacks a cloud business to help monetize that investment. Wall Street expects spending to rise even higher: Goldman Sachs forecasts capex of $125 billion for Meta this year, rising to $144 billion by 2027.

Tesla: Core sales

Tesla is expected to post a softer quarter, with operating margins expected to fall below 5% after deliveries dropped from 496,000 one year prior to about 418,000 following the loss of the federal EV tax credit. Investors will be watching guidance on automotive and energy sales, along with any progress toward future growth from robotaxis and humanoid robots.

AI buzz aside, earnings still pay the bills. For investors, the numbers will tell the story.—SY