Big Tech Earnings to Offer Reality Check Over AI Hype

Big Tech earnings next week will offer investors a dose of reality following this year’s impressive gains in the sector that were powered by hype over artificial intelligence.

Analysts are expecting tech profits to register the biggest drop since 2009, with businesses curbing spending on software, cloud and advertising services as they’re pinched by inflation and higher borrowing costs. Earnings misses on already revised-down estimates could threaten stock prices even as any guidance updates are scrutinized by the market.

Also in focus will be how cost-reduction measures, including headline-grabbing mass layoffs by the likes of Alphabet, Meta and Amazon, have helped ease margin pressures.

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