Meta, Microsoft, and Qualcomm to Release Q2 Earnings Amid AI Market Volatility

ME AI Update: U.S. equities are set to enter a pivotal earnings window for AI tonight. Microsoft, Meta, and Qualcomm will release their earnings after the close on Wednesday Eastern Time, coinciding with the Fed’s interest rate decision and coming on the heels of a recent sharp decline in AI hardware sentiment. Over the past few days, stocks in storage, chips, and semiconductor equipment have continued to face pressure, as investor concerns grow over the return on AI capital spending, valuation dilution, and competition from China’s supply chain. The market’s focus has shifted from “How strong is AI demand?” to “Can these investments truly translate into revenue and cash flow?” Microsoft is tonight’s most critical bellwether. Wall Street expects Microsoft’s quarterly revenue to reach approximately $87.6 billion, with EPS of around $4.24. Investors will closely monitor Azure growth, Copilot commercialization progress, and whether the company provides guidance for fiscal year 2027 capital expenditures. Previously, the market anticipated Microsoft’s FY2026 capex could reach $145 billion—significantly higher than the $88 billion in the prior fiscal year. Meta faces greater pressure around “AI burn.” Analysts expect Meta’s Q2 revenue to be around $60.2 billion, with EPS of approximately $7.19. The company previously guided FY2026 capex between $125 billion and $145 billion. After Alphabet raised its AI capex outlook and saw its stock come under pressure, Meta could trigger renewed concerns over free cash flow if it further increases its guidance tonight. Qualcomm represents another strand of the AI chip trade. Wall Street expects adjusted EPS of $2.24 and revenue of approximately $9.7 billion. Investors will focus on progress in its data center AI business, its $5 billion data center revenue target for FY2027, and whether demand for Android devices in China is recovering. Market participants believe tonight’s key takeaway won’t just be whether earnings beat expectations—but whether these tech giants can demonstrate tangible returns from their AI investments. If Microsoft and Meta deliver strong signals around cloud growth, ad conversion, or AI monetization, the AI sector may find relief. But if capital expenditure guidance continues to rise and free cash flow pressures deepen, funds recently withdrawn from AI hardware stocks may continue shifting toward Hong Kong-listed internet leaders, dividend assets, and low-valuation core stocks. (Source: BlockBeats)