Investors will look for signs that multibillion-dollar investments made by big tech companies into developing artificial intelligence are translating into financial gains, as the “Magnificent Seven” report their annual earnings over the coming days.
Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla propped up the S&P index of blue-chip US companies last year as investors grew excited about the potential of AI, generating 62 per cent of its total 26 per cent return for 2023. The S&P 500 closed at an all-time high on Friday after a blistering rally in tech stocks.
Six of the seven companies — excluding Tesla, whose earnings are expected to decline — will drive the bulk of earnings growth across the S&P 500 when they report their fourth-quarter results over the next two weeks, according to analysts at Bank of America. They added that year-on-year fourth-quarter earnings across the index would have declined without the six companies.