- The Federal Reserve is set to announce its interest rate decision this week, with expectations that it will hold rates steady, although future increases may be considered.
- This week, Amazon, Apple, Meta, and Microsoft will report their earnings, with a strong focus on their AI spending and capital expenditure plans.
- Meta is expected to discuss its capital expenditures during its earnings report on Wednesday, with analysts anticipating a potential increase in its 2026 capex guidance.
- Amazon is likely to provide updates on its capital expenditures, which were previously guided at $200 billion for 2026, as investors hope for an increase following Alphabet's capex forecast hike.
- Apple is expected to report a 20% rise in earnings and a 16% sales gain in its fiscal Q3 results, which will be the last earnings call for outgoing CEO Tim Cook.
- Microsoft has faced stock slumps this year due to high costs associated with its investments in AI data centers and competition from AI startups.
- The Federal Open Markets Committee is likely to discuss AI and other factors influencing inflation during its meeting this week.
- An update on the Fed's preferred measure of inflation is set to be released on Thursday, along with gross domestic product data.
- The odds of a quarter-point rate hike have increased to 36% as of last Friday, reflecting recent jumps in crude oil prices.
Investors are closely watching the earnings reports from the Magnificent 7 tech giants, particularly Amazon, Apple, Meta, and Microsoft, as they reveal their AI spending strategies this week.23456
The Federal Reserve is also set to announce its interest rate decision, with expectations that rates will remain steady, although future hikes are possible.1
Amazon, reporting on Thursday, has indicated a capital expenditure of $200 billion for 2026, with investors hoping for an increase following Alphabet's capex forecast hike. The focus will be on the growth of its Amazon Web Services cloud business, which is crucial for its AI initiatives.
Apple's fiscal Q3 results are anticipated to show a 20% rise in earnings alongside a 16% sales gain, marking the last earnings call for outgoing CEO Tim Cook.
Meta, reporting on Wednesday, is expected to discuss its capital expenditures, with CEO Mark Zuckerberg maintaining ambitious plans to position the company as a leader in AI. Analysts predict Meta may follow Google's lead in raising its capex guidance for 2026, which is currently projected between $125 billion and $145 billion this year.
Microsoft's stock has faced challenges this year due to high costs associated with AI data centers and competition from AI startups, raising concerns about its legacy software business.
As the Fed prepares to release updated inflation measures and GDP data, the tech giants' AI spending will be a focal point for investors looking for insights into future growth and economic conditions.8
“Meta is reportedly exploring selling excess compute capacity or AI model access, while Amazon is increasing hardware rental fees for AI training. Meanwhile, odds of a quarter-point rate hike have tripled to 36% amid rising crude oil prices, with Fed Chair Kevin Warsh scheduled to hold a press conference following the decision.”
