All eyes will be on Silicon Valley next week as a host of the so-called Magnificent Seven post quarterly results.
While investors will be keen to hear from Amazon, Apple, Facebook-owner Meta and Google-parent Alphabet, Wall Street is likely to pay special attention to Microsoft, which has been at the forefront of the Artificial Intelligence boom.
The tech giant has enjoyed a stellar start to the year, becoming the second public company to be valued at $3 trillion, just behind iPhone maker Apple.
Microsoft is cashing in on its early investment in ChatGPT maker OpenAI, which helped put generative AI on the map.
Microsoft shares have jumped nearly 60 per cent since ChatGPT was made public in November 2022.
And some analysts have said that Microsoft’s figures will be a good indicator for how AI will perform in the next year.
‘Investors will all be focused on Microsoft earnings in the last week of January, because that is a sneak preview of what’s coming for the rest,’ said Daniel Ives, research analyst at Wedbush Securities. ‘This is a key period laying the groundwork for who is going to win in the AI arms race.’
Analysts are expecting Microsoft to post total revenues of £48billion in the three months to December and profits of £17billion.
They will also be keeping a close eye on the impact of Microsoft’s £53billion takeover of Call Of Duty video game maker Activision Blizzard, which completed in October. This week Microsoft said it would cut 1,900 roles from its gaming division following the takeover.
