For most of this year, the money pouring into artificial intelligence has been its own argument. A colossal investment boom pushed stock markets to multiple record highs in the first half, and this week some of the companies doing most of the spending report their results. Investors will be laser-focused on signs that the heavy spending is paying off, Bloomberg reports.
Microsoft is up on Wednesday, after the US market closes, with results for the first quarter of its 2027 financial year. Its call with analysts starts at 2:30pm Pacific time, which is 23:30 in South Africa. Amazon and Alphabet, two more of the so-called Magnificent Seven, the handful of US tech giants that dominate the market, report this week too, as do the South Korean chipmakers Samsung and SK hynix.
Why investors want receipts
The nerves are already showing. AI-linked companies have been struggling as investors question whether spending on this scale can last, and last week's numbers from Tesla and Meta stoked those worries and helped drag shares lower. On Monday the Dow, the index of 30 large US companies, closed 1.2% down. "Microsoft, Alphabet and Amazon are about to walk on stage ... Investors want proof now," Stephen Innes of SPI Asset Management told AFP.
Oil and the Fed in the background
Oil, last week's big worry, has been easing. Brent crude, the international benchmark, jumped more than 3% on Friday to a six-month high. It has slipped for two days since, to just below $115 a barrel on Tuesday, as stepped-up diplomacy raised hopes that a broader escalation of the US-Iran war can be avoided. Its American cousin, West Texas Intermediate, was near $101. Supply worries tied to the conflicts in the Middle East and Ukraine are still keeping that market on edge.
The US Federal Reserve also announces its interest-rate decision on Wednesday, and is expected to hold after last month's hike. Traders will be reading it for clues to the Fed's thinking, so Wednesday night carries two things for markets to digest.
For South African investors, Microsoft's numbers land late on Wednesday night. By Thursday morning Microsoft will have shown its hand, and the question markets have been asking since the first half will have one of its answers.
