Earnings season heats up this week, with Big Tech taking center stage. Google and YouTube owner Alphabet is set to release its results weeks after announcing it was selling stock to finance the construction of AI data centers. The move divided investors: AI is spurring demand for Alphabet’s cloud business, but worries that building the technology could drag on profit as infrastructure depreciates have intensified. Still, a number of developments have bolstered confidence in Alphabet, whose shares have roughly doubled in the past year. Consumers have embraced the company’s Gemini chatbot, though news reports saying that the Gemini 3.5 Pro model will be delayed weighed on investor sentiment late last week. Meanwhile, Alphabet has found a way to reduce how much memory AI uses, which could alleviate some of the pressures involved with acquiring components during a memory and data storage shortage.

Tesla’s results, like Alphabet’s, are due Wednesday. CEO Elon Musk has said he wants to shift the business beyond cars and into robots and AI. Tesla is tripling its capital expenditures as it leans into AI endeavors. Still, some believe Musk will eventually seek to merge Tesla and SpaceX, a space, communication, and AI company he recently took public. The Magnificent 7 members’ results come at a volatile time for the AI trade. SpaceX shares have dropped below their IPO price, and sharers of SK Hynix (SKHY)—the world’s largest supplier of high-bandwidth memory—plunged days after debuting on the Nasdaq. Given the jitters, investors will be looking for more clues as to what might come next when ServiceNow reports Wednesday and Intel reports Thursday.

What analysts are saying about U.S. equities 

Yardeni: “The S&P 500 first hit 7,500 on May 14 and has remained stuck around that level. The index continues to cruise along its 50-day moving average. A 6.0% drop would send it back to its 200-day moving average. We have seen this movie before, recently, during late 2024 into early 2025 and again during late 2025 into early 2026. Both saw similar bouts of sideways consolidation, followed by pullbacks that attracted dip buyers. That’s a plausible scenario through September, in our opinion. We are still aiming for 8,250 by the end of this year.”

Morgan Stanley: “Our broadening thesis continues to play out as the index struggles to make headway and former leaders correct. This leadership change is likely to persist and may lead to further consolidation in major indices before the bull market resumes in earnest.” “We still like the hyperscalers versus semis over the next several months…That said, we acknowledge that the risk/reward is less attractive after nearly 30% of relative outperformance in just 3 weeks.”

Evercore ISI: “The post-pandemic environment has ushered in a brave new world. For investors, the Brave New World does not mean the U.S. equity bull market has ended. None of the “endgame” elements are apparent—no recession, a Fed reluctant to hike, long-end yields stable, and no wild-eyed FOMO is widely evident. Tech stock volatility remained elevated throughout the roar of the 1990s even as pullbacks were the rule, not the exception, particularly in the meteoric 2H99, whose price action off the 3/30 market low in summer 2026 so closely resembles.”

JPMorgan: “We are proponents of rotation and of broadening in 2H…we maintain medium-term concerns over the monetization of extreme hyperscalers’ capex surge and stay fundamentally bearish on software, business services, and media-AI cannibalization groups.” “Having said that, we do not expect prolonged market weakness on the back of these rotations…We think that various AI groups should not be falling in absolute terms for long, given likely continued strong earnings uplift and increasing valuation support. In particular, semiconductors should soon start to find a bid.”

RBC Capital Markets: “Our valuation work still isn’t yet sending a clear reversal signal, though some of our charts suggest the rotation is in later innings. Given the sideways move in U.S./non-U.S. performance that has been in place, plus the return of growth/value, high price momentum/low price momentum, and top 10/rest of S&P 500 relative performance to levels close to past inflection points where they’ve been attempting to stabilize, we remain on guard for a shift back into mega-cap growth leadership.