Meta, Microsoft Face Renewed Unease Over AI Spending: US Earnings Week Ahead

Tuesday: Boeing’s (BA US) civil aircraft business could see a $425 million loss as the absorption of fuselage supplier Spirit AeroSystems Holdings Inc. weighs, BI said. Production constraints linger although the Federal Aviation Administration has restored the planemaker’s authority to sign off on newly built 737 Max and 787 jets. Engine availability is still a challenge, RBC Capital Markets noted, adding that is is not materially raising delivery estimates for the second half of the year.

• Coca-Cola (KO US) revenue is set to climb to a record in tandem with a 7.1% adjusted-earnings rise, fueled by better concentrate sales, higher prices and a more favorable sales mix, BI said. Warmer weather in North America and Europe as well as the World Cup bolstered organic sales, Evercore said. Investors may want more color on a July ransomware incident that affected some of the company’s milk operations.
• Visa (V US) could score a modest beat for its network spending volume, thanks to credit growth and consumer spending, BI said. Cross-border volume is expected to shrink a sixth straight quarter as the Iran war chills travel demand, BI added. Visa’s value-added services business is a key focus as it may offer structural benefits in an AI environment, according to BMO. Mastercard (MA US), which reports Thursday, is particularly vulnerable to a prolonged war in the Middle East given its business mix, BMO said, noting that guidance assumes that the conflict would end in the second quarter.

Wednesday: Microsoft’s (MSFT US) revenue is set to hit another record but attention will likely be focused on its AI-related spending plans, especially given the rising cost of components, Piper Sandler said. Analysts already forecast a 74% surge in capex from a year ago. Microsoft’s intelligent cloud segment is set to sustain growth above 20% the sixth quarter in a row.

• Meta (META US) could “significantly” raise its capex outlook to keep pace with rising component costs, BI said. Pressure on user growth will increase as regulators move to curb social-media use among the young, it added. Growth in its family daily active people metric, which estimates the number of individuals using any of Meta’s four core products on any given day, is seen the weakest since 2021.
• Qualcomm (QCOM US) results could come in better than feared even against the backdrop of a weaker smartphone market, aided by early orders from Chinese phone makers and stronger iPhone 18 modem sales, KeyBanc Capital said. The quarter should mark a trough for its handset business, BI said.
• Robinhood’s (HOOD US) prediction markets business could surpass its cryptocurrency trading as a revenue line for the first time ever in this quarterly report, Bernstein said. While its crypto segment has been sapped by weaker trading volumes, other parts of Robinhood’s business are “firing on all cylinders,” Truist said. The earnings call may offer insight on the expected contribution from Rothera, its now-operational prediction-markets joint venture with Susquehanna International Group, Truist said.
• Procter & Gamble (PG US) adjusted earnings could shrink the first time since 2022 while guidance for the fiscal year will be sought as elevated energy prices and tariffs continue to weigh on consumer sentiment and margins. Investors will also want updated guidance on input costs from Colgate-Palmolive (CL US), which reports on Friday. The company said in May it sees additional impact this year from more expensive logistics and raw materials at $300 million. The two firms are among the personal-care product makers that could see further cuts on their volume estimates as the Iran war continues, BI said.
• Starbucks (SBUX US) same-store sales likely rose more than 5% the second straight quarter, a pattern not seen since 2023. Expanded food offerings along with mobile app improvements and store revamps contributed to the traffic boost, BI said.

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Thursday: Amazon (AMZN US) revenue could grow the most in five years to expand 17%, as Amazon Web Services growth tops 30% for the first time since 2022. AI-related services should continue to see strong momentum and drive growth, Truist said.

• Apple’s (AAPL US) restraint over raising prices on its smartphones should help spur market share growth though higher memory costs could see gross-margin guidance for the fourth quarter come in lower than expected, BI said. Capex outlook for 2027 could be lifted to over $18 billion due to data-center spending, BI added. Executives could be asked about a Bloomberg report that it is poised to overhaul its Mac line.
• Yum! Brands (YUM US) faces questions about its full-year outlook after Taco Bell, its best-performing brand, saw foot traffic plummet following a parasite outbreak linked to lettuce sold by one of the fast-food chain’s suppliers. Any impact is likely to be limited since lettuce is not a meaningful menu item and Taco Bell customers can simply skip adding it to orders, BI said.
• Coinbase (COIN US) could miss revenue expectations as crypto prices and trading volumes stay anemic, Baird Equity said. Consensus estimates for the next fiscal year could be further cut, Baird added. Coinbase’s push into prediction markets is critical given intensifying crypto-trading competition from the likes of E*TRADE and Charles Schwab, Raymond James said.

Friday: ExxonMobil (XOM US) adjusted earnings should more than double on surging downstream margins, aided by the firm’s heavy investment in the US Gulf Coast. Conflict in the Middle East is disrupting operations, pushing expenses higher, Jefferies said. Daily production is set to shrink the first time since 2024. Chevron (CVX US) adjusted earnings per share are set to more than triple, thanks to a recovery in production upstream and higher crack spreads downstream, Jefferies added.


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Read more articles by Ignacio Gonzalez, Judy Lagrou, Ann Gehan, Zaeem Shoaib Zuberi