This week marks a defining moment for global equity markets as the world’s five biggest technology names — Microsoft, Amazon, Apple, Meta and Alphabet — report third-quarter earnings. Far from showing signs of bubble-like excess, analysts say the numbers should demonstrate why Big Tech remains the bedrock of corporate profitability in 2025.
1. The cash machine era of AI
Unlike the frothy dot-com days, when companies chased growth without profits, today’s tech titans are funding their artificial intelligence ambitions from deep, self-generated cash reserves. Microsoft NASDAQ:MSFT expects revenue growth of around 14%, driven by a 36% surge in Azure, while Meta is projecting $49.4 billion in quarterly revenue with a 39% operating margin. Amazon NASDAQ:AMZN, meanwhile, has guided for as much as $179.5 billion in sales for the period.
These are not speculative ventures — they are cash machines converting AI investment into tangible returns. Microsoft’s Copilot is rolling into paid enterprise subscriptions; Meta’s AI advertising tools are driving stronger conversion and engagement; and the cloud giants, AWS and Azure, are locking in multi-year contracts worth billions. As one analyst puts it, “The key difference is tangible progress.”
2. Big spending, but with purpose
Capital expenditure remains heavy — Amazon is targeting up to $118 billion in annual spend, while Meta NASDAQ:META could invest as much as $72 billion — but this is not reckless outlay. It funds infrastructure for operations already generating double-digit margins. These firms are effectively using their cash flow to entrench dominance, not chase elusive growth.
“Revenue momentum from AI, cloud computing and digital advertising appears to be building again,” said a wealth manager we spoke with. “With inflation cooling faster than anticipated and policy easing in sight, conditions now look the best they’ve been for these firms in several years.”
- Long Path to take Idox private in £339mn deal
- Rosslyn narrows losses as AI tools begin to lift turnaround
- Company Diary: Shell, Apple, Airbus
3. Earnings could set the tone for global markets
Ahead of the releases, Nasdaq and S&P 500 futures have been climbing as investors position for stronger profits. We expect this week’s reports to come in ahead of forecasts and potentially set the tone for markets into year-end. If Big Tech delivers, we expect the rally to broaden rapidly. These companies remain the heartbeat of global growth — they are not just weathering a higher-rate environment; they’re emerging stronger from it.
The macro backdrop looks supportive. Softer-than-expected U.S. inflation data has boosted expectations of a Federal Reserve rate cut on October 29, with markets pricing in a 95–98% chance of a 25-basis-point reduction. Such a move would add fuel to the tech momentum: if the Fed cuts as the market expects, liquidity will return quickly to growth assets. These companies are first in line to benefit.
4. Company specifics to watch
Meta is riding a resurgence in digital advertising, aided by smarter AI tools that sharpen targeting and measurement. Time spent on Instagram continues to rise, though analysts caution that ad competition and regulatory risks remain live threats.
Microsoft will be closely watched for its balance between AI infrastructure build-out and margins. Analysts expect sustained double-digit growth in Azure but warn that higher capital intensity could briefly pressure profitability. Even so, Microsoft remains the market’s “best-positioned AI utility,” thanks to its deep enterprise reach.
For Alphabet, investors are watching whether AI integration into Google Search begins to reshape its core business. AI-powered ad formats and Google Cloud strength remain bright spots, though near-term volatility is likely as the company experiments with AI-generated search results that may temporarily dent ad volumes.
5. A rally built on solid foundations
We think this next phase of the tech cycle is built on discipline, not hype. Over the last two years, these companies have cut costs, streamlined operations and invested heavily in AI efficiency. This discipline is now translating into higher margins.
We think Big Tech will exceed expectations this week, lifting Nasdaq and S&P 500 to new record highs before year-end. A strong showing could also spark a rotation back into technology and even spill over into Asian semiconductor stocks and digital assets like Bitcoin, which recently traded above $115,000.
What we think
If the results match the promise, the takeaway is clear: Big Tech’s bubble is not in danger of popping anytime soon it seems — it could be in an earnings super-cycle, fuelled by real demand, relentless innovation, and fortress balance sheets.
Related ETFs
Would you like your funds listed here? Contact us
Artificial Intelligence & Robotics UCITS ETF Artificial Intelligence
LON:ARKI / USD 
Artificial Intelligence UCITS ETF Artificial Intelligence
LON:INTL / USD NASDAQ 100 5x Daily Short Nasdaq
LON:QS5S / USD NASDAQ 100® 3x Daily Leveraged Nasdaq
LON:QQQ3 / USD NASDAQ 100® 3x Daily Short Nasdaq
Lon:QQQS / USD S&P 500 S&P 500
LON:WSPX / USD S&P 500 3x Daily Leveraged S&P 500
LON:3USL / USD S&P 500 3x Daily Short S&P 500
LON:3USS / USD
