AI Summary
5 min readFive of the Magnificent Seven tech stocks are reporting earnings this week, and the Federal Reserve is meeting on rates for the last time under Jerome Powell's chairmanship. Meanwhile, Elon Musk is testifying in a lawsuit against OpenAI, and China is tightening its grip on solar manufacturing exports. Here is what happened and why it matters.
The Magnificent Seven earnings and the AI spending question
Alphabet, Microsoft, Amazon, and Meta all reported quarterly earnings today, with Apple joining tomorrow. These five companies—part of the so-called "Magnificent Seven"—have been single-handedly propping up the market. As portfolio manager Susan Schmidt put it, "They're responsible for the majority of returns in both the Nasdaq and the S&P indices."
The core question for investors is not just how much these companies earned, but what they are saying about artificial intelligence and their capital expenditure plans. Schmidt explained that everyone wants to know "when profitability might happen, how much they're spending, and we'll see if investors are concerned or optimistic about the spending path and potential return." The stakes are high because these companies have been spending enormous sums on AI infrastructure, and the market is looking for signs that those investments will eventually pay off.
The Fed's final meeting under Powell
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What you'll learn
- 1 (01:04) **Magnificent Seven Earnings Preview** - Five of the seven mega-cap tech stocks report earnings this week, with Alphabet, Microsoft, Amazon, and Meta releasing results today and Apple joining tomorrow.
- 2 (02:10) **Fed Meeting and Rate Decision** - The Federal Reserve is meeting today with all signs pointing to no change in interest rates, but the accompanying statement and Chair Powell's commentary will be closely watched.
- 3 (03:02) **Elon Musk vs. OpenAI Legal Battle** - Testimony continues in Musk's lawsuit against OpenAI and Sam Altman, with Musk accusing the company of abandoning its nonprofit roots to become a profit-driven enterprise.
- 4 (06:03) **China Tightens Technology Export Controls** - China is increasingly blocking sensitive technology from leaving its borders, recently blocking Meta's acquisition of Chinese AI startup Manus, banning rare earth refining equipment exports, and reportedly considering limits on solar panel manufacturing machinery.
- 5 Standout Quotes
- 6 "They're responsible for the majority of returns in both the Nasdaq and the S&P indices." — Susan Schmidt on the Magnificent Seven's market dominance
- 7 "In the near term, you might be able to slow down your competitor... but in the medium to long term, this might stimulate their ability to be able to move up the value chain and try to develop that capacity on their own." — Kyle Chan on the double-edged sword of export controls
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Five of the Magnificent Seven — Alphabet, Microsoft, Amazon, Meta, and Apple — are reporting earnings this week. These tech titans have kind of been single-handedly holding up the market for a while now. Can the good times last? Then, China is the largest manufacturer of solar energy parts in the world, and it's considering restricting exports of solar panel manufacturing equipment to the United States. And, we look at the highly personal legal battle between Elon Musk and OpenAI’s Sam Altman.
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