Meta, Apple, Microsoft, Tesla: Big Tech earnings set to test AI bets
This week marks one of the most consequential stretches of tech earnings season, with results due from Meta, Microsoft, Tesla and Apple, four giants that sit at the heart of both the market rally and the debate over whether Big Tech’s vast AI spending will ultimately pay off.
It is the second-busiest week of the fourth-quarter earnings season, with 103 S&P 500 companies reporting.
Roughly 75 per cent of firms have beaten expectations so far, according to FactSet, with blended earnings growth running at around 8.2 per cent year on year.
But, investors are increasingly focusing on guidance, capital discipline and how quickly AI investments can translate into sustainable profits.
Tech remains the main engine of earnings growth for the index, and expectations for 2026, with forecast earnings growth of nearly 15 per cent, leave little room for disappointment.
Growth meets regulation for Meta
Meta enters the week with its core ad business still delivering strong growth, but with regulatory and legal risks rising sharply.
In the UK, Ofcom has opened a formal investigation into whether Meta supplied incomplete or inaccurate information about WhatsApp during a market review of business messaging services.
The probe focuses on statutory data requests issued in 2024 and 2025 and carries the risk of enforcement action if breaches are found.
That scrutiny comes just days after Meta paused access to its AI chatbot characters for teens worldwide, following lawsuits and concerns about inappropriate interactions with minors.
In the US, Meta is also heading into a landmark trial in California that will test whether social media platforms can be held liable for alleged harm to young users’ mental health, which is the first case of its kind to reach a jury.
So, investors will be watching whether Meta can reassure markets that rising regulatory costs will not derail its growth story.
Fourth-quarter revenues are expected to exceed $58bn (£42.33bn), supported by improvements in ad targeting and engagement driven by AI tools across Facebook, Instagram and WhatsApp.
Tesla’s narrative
For Tesla, the numbers are expected to be less impressive than the narrative.
A modest year-on-year decline in revenue is anticipated, reflecting weaker vehicle deliveries, intensifying competition, particularly in China, and the loss of US tax credits.
Energy storage growth provides some offset, but margins are likely to remain under pressure.
But investor attention is firmly on Tesla’s longer-term ambitions.
Markets are focused on progress in autonomy, the robotaxi platform and the timeline for scaling next-generation vehicles.
Elon Musk’s commentary during the earnings call is likely to carry more weight than headline earnings.
Tesla also faces reputational noise closer to home in the UK, where its financial services arm has been fined repeatedly for failing to respond to police requests to identify speeding drivers in leased vehicles.
This serves as a reminder that operational discipline remains a real issue, even as the company pitches an ambitious, tech-led future.
Microsoft cloud growth
Microsoft’s results are expected to hinge on Azure performance and AI monetisation.
The tech titan has invested tens of billions of dollars in data centres and AI infrastructure, and investors want confirmation that demand continues to justify that pace of spending.
The recent disruption caused by a faulty Windows update, which left some Outlook users unable to access their emails, has also raised questions about reliability and execution.
While unlikely to materially affect revenues, it reinforces concerns about complexity and scale as Microsoft integrates AI more deeply into its software ecosystem.
Markets will be listening closely for guidance on cloud margins, enterprise demand and how quickly AI services are feeding through into recurring revenues.
Apple faces AI pressure
Apple’s earnings are set to come a day later, but arguably with the highest expectations attached.
The company is expected to deliver double-digit revenue growth, driven by resilient iPhone sales and services income. But the strategic focus will be firmly on AI.
Apple is preparing to unveil a revamped Siri powered by Google’s Gemini model in the coming months, with beta testing expected next month.
Investors want clarity on how Apple plans to compete with rivals that have moved faster on generative AI, and whether AI features can drive the next upgrade cycle.
While Apple’s brand strength continues to underpin sales, patience is not unlimited.
The earnings call will be closely watched for details on product timelines, partnerships and how AI will be embedded across the ecosystem.