{"id":227516,"date":"2025-07-21T09:30:00","date_gmt":"2025-07-21T13:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=227516"},"modified":"2025-07-22T03:52:34","modified_gmt":"2025-07-22T07:52:34","slug":"read-the-room-earnings-season-and-the-week-ahead","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/read-the-room-earnings-season-and-the-week-ahead\/","title":{"rendered":"Read The Room: Earnings Season And The Week Ahead"},"content":{"rendered":"\n

The Focus This Week: US Earnings Season<\/strong><\/h2>\n\n\n\n

Last week, Wall Street\u2019s biggest banks got the conversation started about the second-quarter US earnings season. But the talk will get really interesting in the week ahead. A crowd of companies is set to unveil brand-new numbers \u2013 from tech heavyweights Alphabet and Tesla to consumer<\/a> staples like Coca-Cola and Philip Morris.<\/p>\n\n\n\n

On the surface, this earnings season looks a bit sluggish: FactSet\u2019s \u201cblended\u201d earnings growth rate for the S&P 500 \u2013 which combines the actual results for companies that have reported with estimated numbers for those that have yet to release their results \u2013 sits at 4.8%. And if that\u2019s the actual growth rate, it\u2019ll mark the index\u2019s sleepiest pace since 2023. But don’t let that number deceive you. Companies have a long history of playing it cool with estimates, only to report better-than-expected results. In fact, that\u2019s exactly what has happened in 37 of the past 40 quarters. Based on the average surprise over the last year, the final growth figure will likely land closer to a much more robust 9.5%.<\/p>\n\n\n\n

Now, a hefty chunk of that growth story will rest on the shoulders of Big Tech \u2013 and the Magnificent Seven, in particular. That\u2019s why the market will be leaning way in when Google-parent Alphabet unveils its results on Wednesday. Analysts are expecting a solid 10.7% increase in revenue<\/a> versus a year ago. But investors will be digging into the details for signs that Alphabet\u2019s heavy AI spending is lifting its cloud business (the company\u2019s biggest growth engine). At the same time, they\u2019ll also be watching nervously to see if the rise of Perplexity and other AI tools is starting to chip away at Google\u2019s core search business \u2013 or if its own AI features are cannibalizing the ad dollars it gets from traditional search traffic.<\/p>\n\n\n\n

On The Calendar<\/strong><\/h2>\n\n\n\n