Critical Earnings Week in Stock Markets: Investors, Take Note!

Important Balance Sheet Announcements on the Agenda

The S&P 500 index is expected to see the balance sheet results of technology giants such as Microsoft Corp., Alphabet Inc., and Meta Platforms Inc., which represent about a quarter of the market value, announced on Wednesday. Amazon.com Inc. and Apple Inc. will meet with investors on Thursday.

Investor Expectations and Artificial Intelligence

As investors closely monitor the performance of these leading companies in computing, e-commerce, device sales, and digital advertising, they will also track future forecasts related to artificial intelligence investments. The surge in artificial intelligence spending, which has supported the bull market over the past three years, now faces increased uncertainties regarding whether companies will be able to see returns on these investments. Talley Leger, Chief Market Strategist at Wealth Consulting Group, summarized the situation by stating, "This week will determine whether the rally will continue or take a pause."

Strong Performances in Earnings Season

With the start of the earnings season, companies' strong financial results have continued to support stock markets in the third quarter. According to data from Bloomberg Intelligence, more than a quarter of the companies in the S&P 500 have reported their results, with approximately 85% of them outperforming Wall Street estimates.

Examined Growth and Investments

In addition to the five major companies that have contributed to the observed 15% increase in the S&P 500 this year, giants such as Nvidia and Tesla are also drawing attention. However, the continuation of this growth depends on investors' search for assurance regarding the sustainability of profits from technology companies. Microsoft, Alphabet, Amazon, and Meta are expected to spend a total of $360 billion in capital expenditures in their current fiscal years, a significant portion of which will be directed towards artificial intelligence investments. According to Bloomberg forecasts, this expenditure could rise to $420 billion next year.