This week's big tech gains could be a much-needed catalyst for a market under pressure. Tech stocks powered the stock market for much of this year as investors increased their bets on the growth prospects of artificial intelligence. Expectations that the Fed would soon begin lowering rates had also boosted sentiment at the beginning of the year, but recent evidence of persistent inflation has eclipsed those expectations and soured the market outlook. Last week, the S&P 500 and Nasdaq Composite posted their longest daily losing streaks since October 2022, and the composite had its worst week since March 2022. Big Tech's performance this week will set the tone for the rest of earnings season and market momentum that could lead to an economic recovery. Investors will be looking for signs that artificial intelligence can continue to boost earnings, and that the giant can continue to outperform. Tesla Tesla has begun the reporting period for its “Magnificent Seven” stocks, with results expected to be released after the bell on Tuesday. The electric car giant has faced several challenges since the start of the year, forcing it to cut prices and lay off workers as it grapples with increasing competition and stalling demand in China. The stock has plunged 43%, and some on Wall Street say the decline is far from over. The average price target suggests the stock could rise 33%, according to FactSet. Tesla underperformed expectations last quarter, with CEO Elon Musk warning of an “uncertain” macroeconomic backdrop. Bank of America analyst John Murphy said investors will focus on the highest and final price numbers, but commentary on strategy and demand conditions will play a more important role in post-print price movements. He said that there is a possibility that this could be achieved. TSLA 1Y Mountain Shares Last Year's Results “We remain moderately skeptical about Tesla's growth prospects, but as the company announces future growth drivers (robotaxis and Model 2) in the coming months, “We also see an opportunity. That may be enough to support the stock,” he said, maintaining a neutral rating. Last week, Barclays lowered its price target from $225 to $180 a share, putting pressure on Musk to change course as the company's investment deals face “significant uncertainty.” said. Longtime Tesla bull Emanuel Rozner of Deutsche Bank also put the stock on hold from a buy rating as the company appears poised to shift focus from developing low-cost entry-level vehicles to focusing on self-driving technology. I pulled it down. “Delays in the Model 2 effort risk eliminating new vehicles from Tesla's consumer lineup for some time, which will continue to put downward pressure on volumes and prices for years to come,” he said. “This will likely necessitate a downward revision of earnings forecasts from 2026 onwards.” He said. Meta Platforms Meta Platforms results are expected to be announced after the bell on Wednesday. The social media giant is coming off an acclaimed “Year of Efficiency” and recently unveiled an AI chatbot known as Llama 3. The stock price rose 36% in 2024. Further details about AI advances and how the company plans to apply these tools to improve advertising strategies and engagement will be on the radar of investors this quarter. Wall Street will also monitor the company's Reels product and new advertising features in WhatsApp and Click-to-Messenger. This year's META YTD Mountain Share: “We continue to be encouraged by META's ability to maintain double-digit revenue growth, given the combination of high engagement from our AI investments and improved ROI and efficiency for advertisers.” said Jefferies analyst Brent Thill. While Wall Street largely expects Meta to beat expectations, analysts such as Bernstein analyst Mark Schmulik say there are “high hurdles” to clear and potential risks surrounding China's ad buys. In light of these changes, the company has expressed concerns about the company's future growth. “META remains well-owned, but weak performance and a perception that it lacks new momentum compared to 23 companies has led to a decline beyond the first quarter,” said Doug Anmuth, an analyst at JPMorgan. “There is growing concern about earnings as growth is almost certain to slow.” Alphabet Alphabet has struggled since the beginning of the year, dealing with several setbacks in its AI, including issues with its image generation capabilities that caused the company to pull the tool from the market. While the advertising giant's stock has recouped some of its losses and is up 12% year-to-date, the company's AI prospects will remain a key focus this earnings season. Many analysts expect the search giant to report faster-than-expected revenue growth in the first quarter, with Bank of America analyst Justin Post saying the Street's forecast is “too slow.” ” I think we are predicting that. Search revenue will also be a key metric for investors to watch, and strong results could boost deteriorating AI sentiment, he added. Goldman Sachs analyst Eric Sheridan said industry trends suggest search revenue is strong this year and YouTube revenue is recovering. Analysts say updates on the company's AI vision and new initiatives will also be important to investors, especially after recent setbacks. Jefferies' Till said: “GOOGL will be here to stay long into the second half as the core ad business gains further momentum and awareness improves towards the eventual (25?) AI tailwind.” Stated. But Alphabet is in a tough spot, and a failure could “sound the alarm bells for AI,” according to Bernstein's Shmulik. Microsoft Steady software giant Microsoft has claimed its position as a top-level AI player, and its stock price has risen nearly 7% this year. Analysts are more bullish heading into Thursday's quarterly report, with Wells Fargo's Michael Tulin raising his price target to $480 from $460 for April notes and Microsoft “The best way to use AI.” This correction suggests he would rise 20% from Monday's closing price. Piper Sandler's Brent Bracelin said in an April note that Microsoft's strong performance could increase the company's bullishness on “AI Superstar,” adding that the company expects “early movers to capitalize on first-mover advantages.” It is said to be in the “stage”. Goldman Sachs analyst Kash Langan said Microsoft is “uniquely positioned to grow Gen-AI's revenue without making any structural changes to its profitability profile.” He added, “While Microsoft claims it will significantly increase capital spending to meet demand, we believe this cycle is proceeding more efficiently than previous cycles.” This could help increase the share, he added. Wall Street is also watching his Azure growth, with Bracelin predicting it could reach 30% year-over-year growth in 2023. Deutsche Bank's Brad Zelnick sums it up this way: “Beyond NVIDIA, Microsoft stands as an early leader in garnering incremental investment in GenAI due to its relationship with OpenAI, keen foresight, and rapid innovation driven by his CEO Satya Nadera.” has been established.”
