A major week of earnings results is here for hyperscalers Meta Platforms (META) and Microsoft (MSFT). Both stocks have lagged behind the S&P 500. Increased scrutiny on AI spending is a factor, with significant CapEx growth in 2024 and 2025. Expect discussions on AI outlook during the calls.

EPS and sales revisions for META and MSFT show stability. META’s earnings are forecasted to rise by 1.6%, while MSFT is expected to see a 20% growth rate. MSFT’s sales are projected to increase by 15%, while META’s revenues are expected to grow by 20.7% year-over-year.

Investors closely watch advertising results for META, with AI implementations improving ad relevance and boosting performance. META is expected to post $56.8 billion in ad revenue, a 21% YoY increase. For MSFT, focus will be on cloud revenue, with an expected 27% YoY improvement to $32.4 billion.

Stability in sales and EPS revisions positions META and MSFT well for their earnings reports. MSFT has underperformed in the past two years but could see a change with strong cloud results. An under-the-radar semiconductor stock is identified for growth potential in the booming market.

Read more at Nasdaq: Hyperscaler Earnings Preview: MSFT & META