A crucial week is approaching for global equity markets as earnings from the biggest technology companies put the artificial intelligence driven rally under fresh scrutiny. Investors who have made strong returns by backing smaller AI linked firms are now watching closely to see whether that strategy still holds in 2026, according to a news agency.
The so-called Magnificent Seven Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla powered much of the market’s gains over the past 3 years. That trend weakened toward the end of last year as doubts grew over whether heavy AI spending would deliver results fast enough. The index tracking these stocks peaked in late October and since then most have lagged the broader market. Alphabet and Amazon are the only names from the group that have managed gains during this period.
As interest cooled in the largest tech firms, investors rotated into companies that supply them. Shares of memory and storage makers climbed sharply, alongside power producers and materials companies expected to benefit from expanding data centre demand and stronger economic activity. This earnings season is now seen as a key test. Microsoft, Meta and Tesla report in the middle of the week, followed by Apple. Alphabet and Nvidia report in early February, with Amazon close behind. Together, these firms are expected to post slower profit growth than during the earlier AI boom.
Spending plans remain bold. The largest technology companies are projected to invest hundreds of billions of dollars in data centres and related infrastructure over the next 2 years. Investors are increasingly focused on whether this spending leads to stronger earnings rather than just rising costs. Cloud computing remains one of the clearest areas of AI growth, especially at Microsoft where demand continues to exceed supply. Still, recent market reactions show little tolerance for higher spending without clear profit gains.
Despite the pullback, these technology giants remain central to major indexes and continue to grow profits faster than most of the market. Valuations are not extreme by historical standards, but investors are waiting for clearer proof that AI investments can drive lasting growth. This earnings season may not settle the debate, but it is likely to shape expectations in the months ahead, according to a news agency.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
