This week, five major tech companies, collectively valued at over $10 trillion, are set to report their earnings - Microsoft, Alphabet, Meta Platforms, Amazon, and Apple.

Investors are keenly watching these giants, particularly for insights into the potential benefits from artificial intelligence (AI) technologies. The S&P 500 index continues to push into record territory, largely driven by these tech titans, which were the primary drivers of the index’s 24% gain in 2023.

Amazon and Apple, in particular, are closely tied to consumer behaviour and spending patterns. "Amazon’s performance is a key indicator of the strength of e-commerce, while Apple’s earnings shed light on consumer demand for tech products. As these companies navigate global challenges and evolving consumer preferences, their earnings reports provide valuable insights into economic trends and potential shifts in consumer behaviour," Green says.

"This reporting season for these five major tech companies holds immense significance for investors as their performance not only influences sector-specific trends but also serves as a bellwether for broader market and economic sentiment," says Nigel Green, CEO of deVere Group, one of the world’s largest independent advisors of specialist global financial solutions with over 80,000 clients and $12bn under advisement.

"The S&P 500 index is pushing further into record territory, and this is mostly down to the tech titans. These megacaps were also the drivers of most of the index’s 24% gain in 2023."

Green further adds: "The combined market value of these five tech behemoths is a staggering reflection of their influence on the broader market. Investors often view these companies as barometers for the health of the technology sector and, by extension, the overall economy. A strong earnings performance from these giants can provide a positive sentiment boost to the entire market, while any signs of weakness may lead to increased market volatility."

The tech sector has become a linchpin in driving economic growth, with a significant reliance on digital services, cloud computing, and e-commerce. "The reliance on digital services, cloud computing, and e-commerce has surged, and these companies are at the forefront of these trends. A strong earnings season from tech leaders would signal a continuation of the sector’s pivotal role in supporting economic growth, influencing investor confidence," Green explains.

"Investors are excited by the promises and possibilities of artificial intelligence (AI) services. Companies like Microsoft, Alphabet, and Nvidia have been leading the charge in AI innovation, and their earnings reports will be closely monitored for updates on advancements, partnerships, and commercialization of AI technologies. Positive signals in this regard will drive enthusiasm among investors looking for exposure to cutting-edge technologies," Green says.