Tech investors are honing in on profits following recent layoffs, while companies are gearing up to showcase their advancements in AI. Get ready for some exciting developments in the tech industry!

Get ready for some exciting news from the biggest names in tech! Microsoft Corp, Google parent Alphabet Inc, Instagram owner Meta Platforms Inc, and Amazon.com Inc are all set to report their quarterly results this week. As investors eagerly await the outcome, the companies are expected to highlight how artificial intelligence will be their next growth driver.

Together, these tech giants command more than $5 trillion in market capitalization, which is over 14% of the value of the S&P 500 index. Analysts expect profits to rise 4.5%, on average, from the immediately preceding quarter, led by an 11.8% jump in Meta’s bottom line, according to Refinitiv. From a year earlier, profit is expected to slump nearly 16%, on average, with Microsoft expected to perform the least poorly with a 0.5% slip.

Despite the pandemic-led hiring boom, these four companies announced between November and March that they would slash 70,000 jobs in a rapidly weakening economy. Amazon.com Inc, which reported a big drop in fourth-quarter profit due to valuation losses because of its investment in money-losing EV maker Rivian Automotive, is set to post a first-quarter profit that is expected to increase eight times, when compared with the immediately previous quarter.

According to research firm YipitData, Amazon’s North America sales are set to beat Wall Street estimates in the first quarter.

The companies are also expected to give updates on their AI efforts, a trend noticeable since last quarter when chief executives packed earnings calls with mentions of the technology.

“If last quarter’s message from Big Tech was all about efficiency and bottom line improvement, this quarter’s message is likely to be more forward-looking around the massive potential of artificial intelligence,” said Andrew Lipsman, analyst at Insider Intelligence.

Microsoft has integrated OpenAI’s ChatGPT technology into its search engine Bing, pitting it against market leader Google. Google has begun the public release of its chatbot Bard. Amazon’s cloud division AWS, the world’s largest, has released a suite of technologies aimed at helping other companies develop their own chatbots backed by AI, and Meta has published an AI model that can pick out individual objects from within an image.

“It’s sort of a double-edged sword because there is also pressure for these companies to improve cash flow in an economy that is decelerating,” said Itau BBA analyst Thiago Kapulskis. “There are expectations that companies could create or do even more with AI … every tech investor is expecting those companies to be in the frontier.”

The cloud businesses of Amazon, Google, and Microsoft were also more stable than expected, analysts said.

Microsoft and Alphabet stocks have both risen 19% so far this year. Apple and Amazon are up 28% and 23%, respectively. Meta shares have gained nearly 77%.

The largest company in the world, Apple, which is scheduled to report earnings on May 4, is dealing with slowing demand for iPhones and MacBooks as consumers curb spending.

(Reporting by Nivedita Balu and Tiyashi Datta in Bengaluru; Editing by Sayantani Ghosh and Shounak Dasgupta)

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