Here are the key considerations for the upcoming critical earnings week for the “Mag 7” (Microsoft, Meta, Tesla, Apple) and how the results might impact their recent underperformance:
1. Can strong earnings from Apple and Microsoft reverse recent underperformance?
Strong results from Apple and Microsoft could indeed help to stabilise sentiment and potentially reverse some of the recent underperformance. Analysts expect Apple to deliver solid earnings driven by robust iPhone demand, which could buoy confidence if it beats expectations and offers positive guidance given concerns about margins. For Microsoft, a beat supported by continued cloud and AI growth would demonstrate resilience despite broader valuation pressure among software stocks; both outcomes may ease investor risk aversion and attract capital back into large-cap tech if accompanied by confident future guidance.
2. Does Meta need upside surprises to regain investor confidence?
Given Meta’s notable share price slump and investor scepticism over its AI monetisation and ad performance, it likely needs not just to meet but to surprise on the upside, particularly in advertising revenue and AI-related metrics, to restore confidence. Meta’s underperformance has been compounded by weak relative strength indicators and external macro concerns, so a routine “meet” might be priced in already; a clear beat combined with improved guidance could trigger a stronger rebound.
3. Broader market implications
This earnings week may also serve as a litmus test for the broader narrative around big tech’s valuation and growth trajectory. The market is increasingly focused on proof of monetisation for AI investments rather than just rhetoric. Positive surprises could slow the rotation out of growth stocks, but weak results or cautious guidance might reinforce the trend towards value and cyclical sectors that has persisted in early 2026.
Summary
Apple and Microsoft both have the potential to reverse some underperformance if they deliver strong earnings and constructive guidance.
Meta likely needs upside surprises to materially regain investor confidence rather than just meeting expectations.
The collective outcomes may influence whether the broader market resumes confidence in large-cap tech growth or continues its rotation towards other sectors.
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