Topline

Google parent Alphabet surpassed Wall Street expectations on Tuesday in its third-quarter earnings report, the first domino to fall in a busy week for profits from major tech companies.

Key facts

Important background

In fact, Alphabet shares have underperformed the S&P 500 over the past twelve months, gaining 37% compared to the benchmark index’s 40% over the period, underperforming digital advertising rival Meta by 96% and cloud computing competitor Amazon with 44%. Factors weighing on Alphabet’s share price include concerns about global antitrust investigations and the negative profit impact of aggressive spending in the artificial intelligence arms race. Alphabet shares fell 8% in the three days after reporting second-quarter earnings results, despite beating analysts’ top- and bottom-line estimates. Google has about a 25% share of the global digital advertising market and generates about twice as much in digital advertising revenue as its rival Meta, the parent company of Facebook and Instagram, according to market research firm eMarketer.

What to pay attention to

Fellow West Coast tech giants Amazon, Apple, Meta and Microsoft will report their third-quarter results after their respective markets close on Wednesday and Thursday in a busy week for big tech. These five companies account for approximately $11 trillion, or 21%, of the S&P 500’s combined $52 trillion market cap, and in turn exert outsized influence on the direction of the stock market overall.