{"id":22235,"date":"2026-04-29T17:17:35","date_gmt":"2026-04-29T17:17:35","guid":{"rendered":"https:\/\/www.europesays.com\/news\/22235\/"},"modified":"2026-04-29T17:17:35","modified_gmt":"2026-04-29T17:17:35","slug":"hyperscaler-results-pose-major-test-for-ai-driven-us-stock-market","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/news\/22235\/","title":{"rendered":"Hyperscaler results pose major test for AI-driven US stock market"},"content":{"rendered":"\n

By Lewis Krauskopf<\/p>\n

NEW YORK, April 29 (Reuters) – A pivotal moment for the artificial intelligence<\/a> trade driving the U.S. stock market to all-time highs arrives on Wednesday with quarterly reports from four massive companies at the heart of the investment boom behind the new technology.<\/p>\n

Results are due after \u200cthe market closes from Microsoft<\/a>, Alphabet, Amazon and Meta Platforms — four “hyperscalers” expected to spend over $600 billion this year on data centers and other AI-related infrastructure. \u200cThose heavyweight companies represent more than $10 trillion in market capitalization and 17% of the S&P 500’s weighting, while their recent gains have helped lead the market’s rebound over the past month as stocks have \u200bshaken off concerns over the U.S.-Israeli war with Iran.<\/p>\n

“From a market perspective, they still are the straw that stirs the drinks on big index funds,” said Chuck Carlson, chief executive officer at Horizon Investment Services. “And from an AI perspective, their spending is what is driving the profits for an awful lot of companies.”<\/p>\n

The four companies are among the “Magnificent Seven” megacaps that have been central to the doubling of the S&P 500 since the latest bull market for the benchmark index began in October 2022.<\/p>\n

Shares of the hyperscalers have jumped since \u200cthe S&P 500 hit its low for the year on \u2060March 30. But in recent months, the stocks have also come under pressure as investors question whether the companies’ capital spending will reap sufficient returns to justify the huge outlays.<\/p>\n

Capital spending among the four companies plus Oracle is expected to rise from 50% of \u2060operating cash flow in 2024 to nearly 90% by 2027, according to analysts at Barclays. The ability for the companies to show the investments are paying off will be a focal point for Wall Street on Wednesday, as they scrutinize growth in areas such as cloud computing and advertising.<\/p>\n

“I don’t know how much latitude investors will give these companies to prove they \u200bcan \u200bconvert their investments to cash,” said Noah Weisberger, chief U.S. equity strategist at BCA Research. “I would \u200bhope it’s more than a quarter or two, but I doubt \u200cit’s more than a year. So somewhere in the next couple of quarters, we’re going to have to see not just capex spending, but that turning into revenue growth as well.”<\/p>\n

That the four companies are reporting results nearly simultaneously could make for a particularly vital and volatile moment for the AI trade.<\/p>\n

“We will get the overall picture from all of them right away so we know directionally how the industry is headed,” said Kevin Shea, senior equity analyst at BNY Wealth. “But there could be greater volatility because we’ll have up-to-date comparisons on everyone to see who might be winning at a broader level.”<\/p>\n

From an individual stock perspective, options data is pricing in swings \u200cof 4% for Amazon to 7.1% for Meta following the companies’ respective earnings reports. The options-projected \u200bmoves for Amazon and Meta are still shy of their respective average moves over their past 12 \u200bquarterly reports of 6% and 8.4%. That means investors could still be \u200bcaught off guard by earnings-related surprises.<\/p>\n

The hyperscaler spending has boosted the bottom lines of a wealth of companies involved in building out the \u200cdata centers and other infrastructure needed to support AI applications.<\/p>\n

Those include \u200bchipmakers, whose shares have surged. The Philadelphia \u200bSE Semiconductor Index is up some 40% this year alone and has more than doubled over the past year. Chip stocks pulled back on Tuesday after the Wall Street Journal reported that ChatGPT creator OpenAI<\/a> has missed its goals for new users and revenue in recent months.<\/p>\n

More broadly, a collection of \u200b50 AI-themed stocks tracked by Bespoke Investment Group gained 27.2% \u200cfrom March 30 through Monday.<\/p>\n

“Spending has been ramping up for these companies,” said Walter Todd, chief investment officer for Greenwood Capital. If they tempered \u200btheir spending, that would likely mean “a very negative reaction, at least in the short term, in the whole basket of AI names.”<\/p>\n

(Reporting by Lewis \u200bKrauskopf; additional reporting by Saqib Iqbal Ahmed; editing by Colin Barr and Deepa Babington)<\/p>\n","protected":false},"excerpt":{"rendered":"By Lewis Krauskopf NEW YORK, April 29 (Reuters) – A pivotal moment for the artificial intelligence trade driving…\n","protected":false},"author":2,"featured_media":22236,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[449,6724,8,13501,13499,9,13500,13498,2534,7],"class_list":{"0":"post-22235","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-stories","8":"tag-amazon","9":"tag-data-centers","10":"tag-headlines","11":"tag-market-capitalization","12":"tag-market-perspective","13":"tag-news","14":"tag-pivotal-moment","15":"tag-spending","16":"tag-stock-market","17":"tag-top-stories"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@news\/116489135214215665","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/22235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/comments?post=22235"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/22235\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media\/22236"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media?parent=22235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/categories?post=22235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/tags?post=22235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}