Super Week for the U.S. Tech Industry: Mag 7 Earnings Reports, NVIDIA GTC Conference, Will Tech Stocks Lead U.S. Stocks Again?

This week will usher in the "Super Week" for the American technology industry, with the market's attention highly focused on it.

Among the "Seven Tech Giants," Microsoft, Google, Meta, Apple, and Amazon will intensively release their earnings reports, while artificial intelligence chip giant NVIDIA will hold the GTC conference, with CEO Jensen Huang's speech highly anticipated.

Market sentiment is heating up in advance. Goldman Sachs trader John Flood stated that the current sentiment and positioning around the earnings reports of large tech stocks are the "friendliest" he has seen in a long time. He expects that if there are no missteps in the earnings reports, the market will be "prepared for another rise in the index level led by super-capital technology."

Earnings Season Focus: Cloud Growth and AI Spending

For the market, there are several key observation points in this earnings season.

First is the growth of cloud business. In the last quarter, both Google Cloud and Microsoft Azure saw growth exceeding 30%, showing an accelerating trend, while industry leader Amazon AWS lagged significantly with a growth rate of 18%. According to Bloomberg, Amazon shareholders are closely watching whether AWS can accelerate this quarter. Meanwhile, the recent series of collaborations between Google Cloud and Meta, OpenAI, and Anthropic are also drawing attention to its performance.

Second, capital expenditure will be an important indicator to measure the AI ambitions of tech giants. The market will closely monitor the scale of investments by Microsoft, Google, Amazon, and Meta in data centers and AI infrastructure. Particularly for Meta, which does not have a public cloud business, whether its advertising revenue can continue to support its large-scale capital and operational expenditures in the AI field will be a major highlight of the earnings report. Additionally, Google's search advertising growth rate will also be under scrutiny to assess whether emerging applications like ChatGPT pose a threat to its core business.

Market Expectations at Full Throttle

According to analyst expectation data provided by S&P Global Market Intelligence, the market generally holds high expectations for the performance of tech giants.

• Apple: Expected revenue for this quarter is $102.088 billion, a year-on-year increase of 7.5%; earnings per share (EPS) is expected to be $1.76, a year-on-year increase of 81%. The market expects that the new iPhone 17 will boost sales, but there are signs that consumers prefer the lower-priced base models, which may lead to revenue growth falling short of expectations.

• Microsoft: Expected revenue for this quarter is $75.387 billion, a year-on-year increase of 14.9%; EPS is expected to be $3.66, a year-on-year increase of 10.9%.

• Alphabet (Google's parent company): Expected revenue for this quarter is $100.11 billion, a year-on-year increase of 13.4%; EPS is expected to be $2.27, a year-on-year increase of 7%.

• Meta Platforms: Expected revenue for this quarter is $49.388 billion, a year-on-year increase of 21.7%; EPS is expected to be $6.72, a year-on-year increase of 11.4%

• Amazon: The expected revenue for this quarter is $177.7 billion, a year-on-year increase of 11.8%; EPS is $1.56, a year-on-year increase of 9%.

NVIDIA GTC Conference: AI Barometer

In addition to the earnings report, the NVIDIA GTC conference held in Washington is another major focus this week. The event is primarily aimed at developers, customers, and business partners within the AI ecosystem.

CEO Jensen Huang is scheduled to deliver a keynote speech on Tuesday, which is expected to reignite market enthusiasm for AI. Although such events are intended to promote NVIDIA's own business, they are also seen as an important window to capture the latest technologies and business trends in the AI field.

Market Sentiment Optimistic, Goldman Sachs Bullish on Future

Before key events unfold, the optimism in the investment community is already quite evident. Tony Pasquariello, head of Goldman Sachs' hedge fund business, summarized that the current trend of core assets remains unchanged, and any bearish rhetoric will face challenges against the Federal Reserve, U.S. fiscal stimulus, and the massive expenditures of large tech companies.

The challenge of any bearish rhetoric is: you will be fighting against the Federal Reserve... as well as U.S. fiscal stimulus... and the spending of large tech stocks.

The bank's trading department even ranked mega-cap tech stocks by position strength, in order: Google, Microsoft, Meta, NVIDIA, Amazon, and Apple, showing strong confidence in specific companies. If this week's earnings reports and industry dynamics can corroborate this optimistic expectation, tech stocks may see new upward momentum.