The Stock Market's Most Important Day of the Quarter Has Arrived
Key Points
Four companies at the center of the AI boom -- Alphabet, Amazon, Meta Platforms, and Microsoft -- will report earnings after the market closes.
Federal Reserve Chair Jerome Powell will discuss the economy in a press conference after the central bank announces its interest rate decision.
- 10 stocks we like better than S&P 500 Index ›
The five largest AI hyperscalers -- Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), and Oracle -- reported about $414 billion in capital expenditures last year, up 70% from the prior year. Those companies expect capital expenditures to climb nearly 70% to $700 billion this year.
However, whether or not that spending ultimately leads to greater profitability depends on the extent to which customers adopt AI software and services. Investors will get insight into that situation today, because four of those hyperscalers report financial results. Good news could drive the S&P 500 (SNPINDEX: ^GSPC) higher, and bad news could drag the benchmark index lower.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Here's what investors should know.
Image source: Getty Images.
Four hyperscalers at the center of the AI boom report quarterly earnings today
Alphabet, Amazon, Meta Platforms, and Microsoft account for about 18% of the S&P 500, which means the index's performance is heavily influenced by those four hyperscalers. Here's what Wall Street expects when they report earnings after the stock market closes on Wednesday.
Alphabet
The consensus estimate says Alphabet's revenue will increase 19% to $117.2 billion and GAAP earnings will drop 7% to $2.62 per share. Investors will watch the core advertising business as a gauge for the broader economy, but they will focus on Google Cloud, where sales growth has accelerated in three straight quarters because of strong demand for Gemini models and custom artificial intelligence chips called tensor processing units (TPUs).
Amazon
The consensus estimate says Amazon's revenue will increase 21% to $188.9 billion and GAAP earnings will increase 3% to $1.65 per share. Investors will look for margin expansion in the e-commerce division, which should materialize over time because of investments in AI and robotics. Investors also want to see strength in the cloud computing division, where revenue growth accelerated to 24% in the fourth quarter, the fastest growth in three years.
Meta Platforms
The consensus estimate says Meta Platforms' sales will increase 31% to $55.5 billion and GAAP earnings will increase 5% to $6.74 per share. The company's investments in AI have so far boosted engagement across its social media properties, leading to strong demand from advertisers, but investors want to see that trend continue or even intensify. They will also want to know how Meta's newest AI model, Muse Spark, might move the financial needle.
Microsoft
The consensus estimate says Microsoft's sales will increase 16% to $81.3 billion and non-GAAP earnings will increase 17% to $4.06 per share. Investors want evidence Microsoft is monetizing Copilot 365, especially because competitors such as Anthropic and OpenAI are churning out generative AI tools that could disrupt the software industry. Investors also want to see sales growth reaccelerate in the cloud computing division Azure.
Here's the big picture: In general, Wall Street expects muted earnings growth from these companies. That's because heavy investments in AI infrastructure are projected to compress profit margins in the near term. Naturally, investors want reassurance that those investments will eventually translate into greater profitability. The S&P 500 could drop sharply if these companies fail to ease lingering doubts when they report earnings.
The Federal Reserve will announce its interest rate decision today
Earnings reports are not the only catalyst that could move the stock market this week. The Federal Reserve will announce its interest rate decision around 2:00 p.m. ET today. The odds of a rate cut are essentially zero, because inflation has reaccelerated since the Iran conflict began in late February.
However, investors will listen closely to what Chair Jerome Powell says about the economy during his press conference, looking for insight into the future trajectory of interest rates. The S&P 500 is currently near its record high, but any indication that the Fed's next move could be a rate increase (rather than a rate cut) could cause the stock market to drop sharply.
Should you buy stock in S&P 500 Index right now?
Before you buy stock in S&P 500 Index, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $492,752!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,327,935!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 201% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 29, 2026.
Trevor Jennewine has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.
Recommended Articles
