Nasdaq Positive Ahead of Big Tech Earnings

Tech-heavy Nasdaq posts record highs as the bulk of the former "Magnificent 7" are set to report earnings this week, and investors are wondering if the mixed results trend will continue.

Nasdaq Ahead of Major Earnings

• AI in focus as investors look for evidence that the billions in investments are paying off.
• Demand for cloud storage and computing is expected to continue to support the bottom line of tech companies.
• Mixed results from Tesla and Google left markets still uncertain about the trajectory of tech for the rest of the year.

AI Rising to New Heights

Trade optimism has pushed the Nasdaq to record highs ahead of earnings reports from four of the largest technology firms. The sector has returned to being a leader of growth in the second quarter, recovering from the slump following Liberation Day, and is up 14% year-to-date. Last week, earnings from . Still, analysts suggest that the coming crop of reports could be positive as investment in , at least in terms of cloud revenue. However, investors will also be looking at more traditional income, as slack in the economy has hurt consumer sentiment in the last quarter.

Key Players Reporting

Meta will report its earnings on Wednesday after the close, with analyst consensus that per share from $5.16 in the same period last year. Revenue is projected to increase 15% to $44.8 billion. CEO Mark Zuckerberg's plan to invest hundreds of billions into a superintelligence network will be in focus, with analysts noting that most of the AI investment has gone into enhancing its advertising platform.

Microsoft has scheduled its earnings release for after the market closes on Wednesday. The consensus among analysts is that its per share from $2.95 for the same quarter last year. Revenue is projected to improve by 14% to $73.8 billion. Azure remains the focal point for investors, but recent growth in cloud income might have set a high bar.

Amazon will report its earnings after the close on Thursday, with per share from $1.26 a year ago. Revenue is expected to increase 9.5% to $162.0 billion. Investors are likely hoping the company improves its outlook after disappointing in the prior quarter, citing trade policies and recession fears.

Apple is per share when its earnings come out after the market closes on Thursday. The bottom line is up marginally from $1.40 a year ago, and revenue is projected to rise 3.7% to $89.0 billion amid criticism that the company hasn't done enough to incorporate AI. The company didn't provide guidance last quarter, as it was affected by the trade war.

Widening Triangle Leaves Plenty of Headroom for the Nasdaq

The Nasdaq has been trending upward since its April low, with the RSI fluctuating in and out of overbought territory, indicating a bearish divergence. An earnings-fuelled move upward could find resistance at the round 24000 level, with a break above coming up against the long-term upward trend line of the broadening triangle around 24500. If the market corrects, it could find support at the near-term swing low at 21500, followed by the May swing low at 20800.

Source: SpreadEx | US Tech 100