Investing.com — Nasdaq futures are edging higher on Wednesday as Wall Street braces for one of the most consequential earnings sessions of the year, with Alphabet, Amazon, Meta and Microsoft all set to report after the close.
The four companies carry a combined options-implied move of more than $750 billion in market capitalization, in either direction.
Nasdaq futures are up 0.4% ahead of the open, but the mood is cautious.
Wolfe Research analyst Chris Senyek flagged that yesterday’s news of OpenAI missing internal sales and user targets rattled tech stocks, with semiconductors leading the sector lower.
“Markets were vulnerable to any whiff of bad news and overbought after a rip off the bottom,” Senyek wrote, adding that a capex surprise from tonight’s reporters could trigger a further “revolt” by investors.
That capex question looms largest. Analysts are watching whether any of the four companies signal further increases to already massive infrastructure spending plans, which could reignite concerns about the pace of returns on AI investment.
Meanwhile, Peter Corey, chief market strategist at Pave Finance, offered a broader warning, noting that semiconductors now account for nearly 15% of total U.S. stock market capitalization, double their share at the dot-com peak.
He believes that with the big tech earnings due, “the market faces a critical test of whether that optimism is justified.”
“The rally will pull back,” Corey said. “The only thing worth debating is what it looks like on the other side.”
On the individual names, analysts are broadly constructive.
Truist’s Youssef Squali expects Alphabet to post 17% top-line growth, the second-highest rate since the first quarter of 2022, driven by resilient Search and 45% Cloud growth.
BofA’s Justin Post expects a Meta beat, forecasting first-quarter revenue of $56 billion against a Street estimate of $55.4 billion, though he flagged macro uncertainty around the second-quarter guide as the key near-term risk.
Jefferies’ Brent Thill sees Amazon positioned for upside driven by AWS acceleration and resilient retail demand, anchoring on AWS growth of roughly 25% year over year.
Stifel’s Brad Reback was more cautious on Microsoft, writing that Street revenue and EPS estimates “remain too high.”
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