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Tech Titans Kick Off Q2 Earnings Season

Tech Titans Kick Off Q2 Earnings Season

 

Wall Street enters a critical stretch this week as the second-quarter U.S. earnings season gathers momentum. Kicking off the Magnificent Seven this evening are technology heavyweights Tesla and Alphabet, both set to report after the market close. Their results will mark the start of a reporting wave dominated by Big Tech and major cross-sector bellwethers over the coming fortnight. 

Aggregate earnings across the S&P 500 are expected to rise modestly, between 4% and 5% year-over-year – according to FactSet, following a patchy economic landscape defined by high interest rates, tariffs, and shifting supply chains. The growth burden is expected to fall disproportionately on the so-called “Magnificent Seven” tech firms, which analysts forecast will contribute over 14% earnings growth, compared to single digits for the rest of the index. 

 

Tech Sector in the Spotlight

Anticipation is high for Tesla and Alphabet, whose divergent business models offer investors a snapshot of very different parts of the tech economy. Alphabet, the parent of Google and YouTube, is expected to post solid double-digit revenue growth, with analysts forecasting quarterly sales around $88 billion and earnings of approximately $2.16 per share. A rebound in digital advertising and renewed growth in its Google Cloud unit are expected to be key drivers, while investors will also focus on the company’s ongoing AI investments as it tackles rising competitive pressure from Microsoft-backed OpenAI. 

Tesla, by contrast, is navigating a profitability squeeze. Vehicle deliveries in Q2 dropped roughly 13.5% year-on-year, and analysts expect quarterly revenue to fall to about $22–23 billion, down from $25 billion a year earlier. Earnings per share are projected at $0.35, reflecting the continued pricing pressure in the electric vehicle market. Guidance on cost controls, factory expansion, autonomous driving and energy storage progress, and any remarks from Elon Musk on a potential re-entry into U.S. politics, could influence perceptions of the company’s strategic direction. 

While Tesla and Alphabet anchor this evening’s earnings reports, several other tech players are due in the coming days. CPU manufacturer Intel reports this Thursday after market close whilst Advanced Micro Devices which has pivoted towards AI-centric data centre chips will follow in early August. Analysts are watching for early signs that the semiconductor cycle is stabilising ahead of market leader NVIDIA’s earnings report at the end of the earnings season on August 27th. 

Palantir Technologies, long known for its work with U.S. government agencies, is set to report earnings on August 4th. Outside of its flagship Gotham platform for governmental work, It has made significant inroads commercially with its Foundry software and Artificial Intelligence Platform (AIP), which allows businesses to integrate large language models with proprietary data in secure environments.  

Palantir’s first full year of profitability in 2024 wooed investors as it enabled them to scrutinise their performance; however, the company’s lucrative government business remains largely opaque, as the classified nature of many contracts prevents disclosure of key financial details, leaving analysts reliant on top-line trends and high-level metrics rather than a clear view of segment-level profitability. Its focus for the time being remains on expanding its commercial footprint across sectors including healthcare, energy, and manufacturing. Considering recent multi-year contracts with major global enterprises, the pace of new customer acquisition, average deal size, and the scalability of its AI offerings will be closely scrutinised during its Q2 earnings update. Palantir’s share price has climbed 98% year-to-date. 

Big Tech’s companies account for more than one-third of S&P 500 earnings. With six members of the “Magnificent Seven” reporting in the next fortnight – Tesla, Alphabet, Microsoft, Meta, Apple, and Amazon – their performance will help determine whether recent gains in the index are built on firm ground. 

 

Banking Sector Recap

The financial sector traditionally opens earnings season, and early reports from large U.S. banks were broadly positive. JPMorgan Chase, Bank of America, and Goldman Sachs posted solid Q2 profits, helped by strong trading revenue and a modest revival in deal-making. Net interest income remained a key tailwind, although the boost from rising interest rates is starting to fade as deposit costs catch up. 

Bank executives have struck a cautious tone. JPMorgan CEO Jamie Dimon cited persistent risks – from geopolitical tensions to elevated inflation – as reasons to remain vigilant. Regional banks, still recovering from turmoil earlier this year, are also under scrutiny for deposit flows and loan quality. So far, credit metrics remain stable, though lenders have increased reserves in anticipation of potential strain on consumers. 

One area of concern is credit card debt. American Express reported record revenues but also noted that more customers are revolving balances – a sign that some households are feeling the pinch. With consumer spending still robust but increasingly uneven, upcoming results from consumer lenders and fintech firms will offer deeper insights into household financial health. 

The sector remains in transition, whilst the era of rising margins from rate hikes may be over, banks’ future growth is anticipated to depend more heavily on loan volume, asset quality, and cost management in a higher-for-longer rate environment. 

 

What’s Next

With only around 20% of S&P 500 companies having reported so far, early indicators suggest a stronger-than-expected earnings season. Roughly 80% of companies have beaten profit estimates, surpassing historical averages and modestly raising forecasts for overall Q2 growth. 

The peak reporting window lies just ahead, spanning July 28th to mid-August. That period will feature results from Apple, Amazon, Microsoft and Meta; lesser-known favourites including MicroStrategy, Robinhood, Palantir and Uber; as well as the major firms across all sectors. 

Tesla and Alphabet’s results this evening will set the tone. A strong showing from these two tech bellwethers could extend recent market gains. But with valuations stretched and growth expectations high, the coming weeks may test just how durable investor confidence really is. 

 

This article is for informational purposes only and does not constitute investment advice, a personal recommendation, or an offer or solicitation to engage in any investment activity. The mention of any security, commodity or issuer should not be interpreted as a recommendation to buy or sell. Any views expressed are based on public information believed to be reliable at the time of writing, but no representation or warranty is given as to its accuracy or completeness. 

AMT Futures Limited may trade in the instruments mentioned. For full disclosures, please refer to our Trading Notes.

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