The financial reports of technology giants have taken turns to "blow up the streets" this week. Where will the rotation of AI trading in US stocks go? Read in one article

The financial reports of technology giants have taken turns to "blow up the streets" this week. Where will the rotation of AI trading in US stocks go? Read in one article.

In the past week, market conditions have been turbulent, war has reignited in the Middle East, and the seemingly unshakable semiconductor industry has also suffered a sharp sell-off. As of last Friday's close, all three major U.S.

stock indexes had recorded losses last week, with the Dow Jones Industrial Average falling 0.93%, the S&P 500 Index falling 1.55%, and the Nasdaq Composite Index having the largest decline, falling 2.9% cumulatively. Investors will have another busy five days this week, highlighted by earnings reports from the Big Seven, Alphabet and Tesla, on Wednesday.

Kevin Mahn, chief investment officer of Hennion & Walsh Asset Management, said that if Alphabet releases any signal to reduce its AI investment budget, it may trigger a chain reaction throughout the AI industry chain and have a serious impact on AI transactions.

Beyond that, investors will also be watching Thursday's report from Intel, a review of the chip deal, as well as reports from GE Vernova and Honeywell, which should give investors a sense of how the business is doing on the industrial and power demand side.

Tech giant IBM's earnings report on Wednesday will also be crucial for investors, after CEO Arvind Krishna issued a downbeat letter that sent shares tumbling sharply.

In addition, reports from AT&T, T-Mobile and Verizon will provide investors with a reference for the state of the telecom industry, which may be of particular interest, especially after SpaceX enters the market.

Big tech companies need to deliver 'measurable returns' Since June 22, the plunge in global chip stocks has wiped out more than US$3 trillion in market value, with most of the funds flowing into the "Big Seven" (referring to US technology giants).

This week, this rotation will be significantly tested by both parties: the seven giants Alphabet and Tesla will release their latest financial reports, and the chip giant Intel will also release its financial reports.

Capital.com analyst Daniela Hathorn said: "Investors will be closely watching whether earnings can support high valuations and whether the recent pullback will turn into a broader correction or simply a pause in the AI-driven rally." Semiconductor sales increased 79% year-on-year in the first quarter of 2026, up from 38% in the fourth quarter of 2025.

BNP Paribas expects second-quarter sales to rise 132%.

BNP Paribas analysts said that for large technology companies, data center capital expenditures by the top five hyperscale data center operators - Microsoft, Alphabet, Amazon, Meta and Oracle - are expected to increase by 79% year-on-year to $644 billion in 2026, and by 18% year-on-year to $759 billion in 2027.

Jeff Buchbinder, chief equity strategist at LPL Financial, said the most critical question is whether all this spending will deliver a reasonable return on investment. These days, it’s no longer enough to just put money in – investors want to see real results. "Artificial intelligence is entering a new phase.

The focus of market pricing is shifting from promise to execution," Buchbinder wrote in a report. He said the recent pullback in the semiconductor industry should signal to investors that the shift has begun. “Investors are focusing less on who invests the most and more on who gets measurable returns from those investments,” he added.

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