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Wall Street is gearing up for the highlight of earnings season this week.
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Mega-cap names that make up the Magnificent Seven will begin reporting, starting with Tesla.
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Investors are looking for Elon Musk to soothe fears after a tough stretch, while AI will be front and center more broadly.
Investors are gearing up for what's become the main event of earnings season in recent quarters, zeroing in on mega-cap firms as they unveil their first-quarter results.
Despite recent dips, investors are hoping major tech giants can keep the momentum rolling, with artificial intelligence in focus as the technology continues to captivate Wall Street.
"I think the next few weeks, this is a 'get out the popcorn moment' for tech," Dan Ives, senior equity analyst at Wedbush Securities, told Bloomberg TV last Thursday, adding that this earnings period will be a "flex the muscles moment" for tech companies and a "golden buying opportunity" for investors.
Excitement is high as investors look for the next catalyst to help spur fresh gains for stocks amid a dreary stretch and a sell-off sparked by still-hot inflation and geopolitical turmoil in the Middle East.
Here's what Wall Street is focusing on as the first crop of mega-cap titans gets ready to report.
Tesla — April 23
Elon Musk's car company is causing investors a lot of stress heading into earnings, with a laundry list of woes on the radar, including a dive in vehicle sales in the first quarter, controversy over Musk's $56 billion pay package, and recent layoffs that saw the company axe over 10% of its staff.
The stock is down 40% year-to-date, and a slew of banks have downgraded their outlook for the shares as it pivots from a more affordable vehicle model and toward initiatives like robotaxis and full self-driving tech.
However, Wedbush's Dan Ives said he still remains bullish but emphasized that Musk must address key issues during the earnings call next week to keep investors from fleeing the stock.
That includes explaining China's growth decline, providing clear guidance on growth, margins, and cash flow, confirming the development status of Model 2, and detailed plans for AI.
Alphabet — April 23
Bank of America is bullish on the Google parent heading into earnings, saying in a note on Thursday that limited job openings indicate cost management, but analysts foresee 13% upside potential above Wall Street's 11% growth estimates, thanks to robust YouTube performance.
Additionally, the bank thinks highly of Google's robust search results, seeing them as the second catalyst for a recovery in AI sentiment after the March lows, especially with the Google I/O developer event still on the horizon.