Big Tech companies face mounting pressure to demonstrate artificial intelligence investment returns through earnings results as semiconductor stocks plunged last week. The S&P500 index fell 1.6% and the Nasdaq100 declined 4.1% last week, while the Philadelphia Semiconductor Index dropped 10% in its worst week since April 2025, according to Bloomberg. The declines followed cooling AI optimism that had driven US stocks to all-time highs one month ago, with investors now questioning whether massive infrastructure spending will translate into revenue growth.
S&P500 and Nasdaq100 Record Weekly Declines
The S&P500 index fell 1.6% last week while the Nasdaq100 dropped 4.1%, according to Bloomberg reporting on local time. Elon Musk's SpaceX fell below its initial public offering price for the second consecutive week, with market capitalization down 1 trillion dollars from its peak.
Jake Seltz, portfolio manager at Allspring Global Investments, stated: "Investors have reached a point where they feel uncomfortable about the scale of spending and are concerned about a bubble. Ultimately, it's time to confirm revenue reacceleration."
Tesla and Alphabet Begin Earnings Season on the 22nd
Tesla and Alphabet will open Big Tech earnings season on the 22nd. Microsoft and Meta Platforms follow on the 29th, with Apple and Amazon.com reporting on the 30th. These six stocks account for one-quarter of the S&P500 index's market capitalization.
Bloomberg projects the two-week earnings period will serve as a test for finding evidence that investments are generating larger returns.
Alphabet Capital Expenditure Expected to Reach $187 Billion
Alphabet's capital expenditure is expected to reach $187 billion this year, more than double last year's amount. The company's stock fell 6.5% over two trading days following reports of delayed launch for its flagship model Gemini 3.5 Pro.
Todd Ahlsten, chief investment officer at Parnassus Investments, stated: "At some point, questions about earnings become too large to justify high valuations. Focus will be on cloud gross margins and AI revenue per dollar of computing."
Philadelphia Semiconductor Index Falls 20% from Peak
The Philadelphia Semiconductor Index rose 65% year-to-date but fell 20% from last month's all-time high, reaching the technical bear market threshold. Semiconductor stocks, which receive a significant portion of AI infrastructure spending, have experienced daily volatility recently.
Apple Leads M7 Performance with 23% Gain
Apple delivered the best performance among M7 stocks this year with a 23% gain. The company has implemented AI services through partnerships rather than large-scale capital expenditure.
FAQ
What happened to US tech stocks last week?
The S&P500 index fell 1.6% and the Nasdaq100 declined 4.1% last week, while the Philadelphia Semiconductor Index dropped 10% in its worst week since April 2025, according to Bloomberg.
When do Big Tech companies report earnings?
Tesla and Alphabet report on the 22nd, Microsoft and Meta Platforms on the 29th, and Apple and Amazon.com on the 30th. These six companies represent one-quarter of the S&P500 index's market capitalization.
How much is Alphabet expected to spend on capital expenditure this year?
Alphabet's capital expenditure is expected to reach $187 billion this year, more than double last year's amount.
