Reinhardt Gert Coetzee @reinhardtcoetzee: "𝘽𝙞𝙜 𝙏𝙚𝙘𝙝 𝙀𝙖𝙧𝙣𝙞𝙣𝙜𝙨 𝙒𝙚𝙚𝙠: 𝟮𝟳..."

South Africa

𝘽𝙞𝙜 𝙏𝙚𝙘𝙝 𝙀𝙖𝙧𝙣𝙞𝙣𝙜𝙨 𝙒𝙚𝙚𝙠: 𝟮𝟳 𝙊𝙘𝙩𝙤𝙗𝙚𝙧 𝟮𝟬𝟮𝟱 📆 Big Tech Earnings Week is Here This is a big week for tech, and by extension, due to their sizes currently - also for the rest of the market — the tech titans (excluding Nvidia) are all reporting earnings this week: Microsoft $MSFT (Microsoft) – Wednesday Alphabet $GOOG (Alphabet) – Wednesday Meta $META (Meta Platforms Inc) – Wednesday Apple $AAPL (Apple) – Thursday Amazon $AMZN (Amazon.com Inc) – Thursday These companies are the backbone of the market — together (with Nvidia) they now make up nearly a third of the S&P 500. What’s more, with the rise of artificial intelligence, the $SPX500 has quietly become a bit of an “AI fund” in disguise — heavily driven by the same small group of companies building and funding the next wave of AI growth. 𝙒𝙝𝙖𝙩 𝙄’𝙢 𝙒𝙖𝙩𝙘𝙝𝙞𝙣𝙜 1️⃣ AI & Cloud Spending: Capex has been soaring as these companies build out AI and data center capacity. The question now is whether that spend is starting to translate into meaningful returns, or if it’s still pressuring margins. 2️⃣ Forward Guidance: At these valuation levels, a solid earnings beat isn’t always enough — the real focus will be on what they say about next quarter. Are they expecting growth to accelerate, or starting to see signs of cooling demand? 3️⃣ Margins & Cost Discipline: With so much excitement around AI, investors have been giving Big Tech some leeway on costs. But we’ll see how long that patience lasts if profitability starts to dip. 4️⃣ Market Impact: Given their size, any miss or weak guidance from one of these names could ripple across the broader market — and vice versa if results come in strong. ⚙️ The AI “Circular Spend” Concern One area that does concern me and one I’ll be watching more closely is the circular nature of AI spending wev'e been seeing more of lately — where the same companies funding, building, and consuming AI infrastructure are effectively feeding demand back into their own ecosystems. 𝙈𝙮 𝙏𝙖𝙠𝙚 I’m still long-term bullish on the tech sector — the fundamentals and innovation remain strong. But, near-term valuations are stretched, and expectations are high. I’ll be looking for earnings quality, not just growth headlines — clear evidence that margins are holding up and that AI investments are starting to show potential returns. For now, I’m staying selective and maintaining a bit of a cash buffer — not because I expect bad results, but because it’s a good hedge in case the market reacts sharply to any disappointments - or to any other unknowns from the broader macro economy. Best, Reinhardt