It’s a big week for Big Tech. The sector that had long charmed Wall Street has suddenly been in reverse, with unimpressive numbers last week from Alphabet, Google’s parent, and an earnings miss from Tesla triggering a broad sell-off in technology stocks that rippled out across New York’s market, as well as much of Asia and Europe.

So when Amazon, Apple, Meta Platforms and Microsoft report their latest quarterly figures this week, they will present an important test. Investors, in particular, will want to see evidence that the explosion in artificial intelligence, the fast-developing technology that been dominating many a corporate conversation, is going to pay off for the technology powerhouses.

The growing size of these mega-caps means that their earnings reports have a disproportionate impact on entire market indices. The top ten companies in the S&P 500, for example, account for 37 per cent of the index’s market cap but contribute 24 per cent to its earnings, the widest difference since 1990, according to an analysis by Apollo Global Management. More volatility could follow as traders look for evidence that these groups, which have been rapidly increasing their investments in AI, will be able to deliver growth impressive enough to justify their stretched valuations.

Microsoft will set the tone on Tuesday when it reveals its results for the final quarter of its latest financial year. The $3.1 trillion business is expected to announce revenue growth of 14.6 per cent to $244.9 billion, according to estimates compiled by FactSet. A closely watched indicator will be growth in Azure, its cloud computing business, which has benefited from the AI boom as customers train and run AI workloads using its platform. This division is expected to have expanded by 30 per cent in the period.

The software company is likely to face scrutiny over the global IT outage this month that was triggered by Crowdstrike, the cybersecruity business, but affected more than eight million Microsoft Windows devices. Traders will be keeping a watchful eye, too, on capital expenditure as Silicon Valley spends billions of dollars on upgrading systems and servers to develop and run AI technologies. Microsoft is expected to have built up $49.6 billion in capital expenditure by the end of its present financial year.

On Wednesday Meta, Facebook’s owner, will take its turn in the spotlight, with analysts hoping for an update on what it expects as a return on its billions of dollars of investment in AI infrastructure. Analysts at Jefferies, the broker, have suggested that with election campaigning under way in the United States and amid uncertainty about moves to ban its rival TikTok in America next year, Meta could benefit from stronger advertising spending.

Next up will be Amazon on Thursday, after the market closes. The cloud computing and ecommerce group has said that it views generative AI as an opportunity worth possibly tens of billions of dollars in revenue and it is pursuing growth here across its entire business, which includes Amazon Q, its generative AI-powered assistant, as well as Bedrock, a platform to help to build genAI models, and its own custom silicon chip. On the consumer side, analysts expect it to aim to install an AI shopping assistant on its ecommerce platform and early reports suggest it could soon announce the launch of an enhanced Amazon Alexa service.

Expect details, too, of the success of its summer “Prime” event, the two-day sales bonanza in July when it offers customers of Amazon Prime special discounts. The headline figures have been strong so far, with sales in the period up 11 per cent to $14.2 billion. Analysts are expecting strong growth from Amazon Web Services, the cloud computing division, of 17 per cent year-on-year in the second quarter.

Apple also will report on Thursday. The iPhone maker has been late to the AI party, with no discernible strategy in the field until only a month ago, when it unveiled a suite of new AI-enabled tools that will be launched on some of its devices in September.

The company has been struggling with a slowdown in sales, especially in China, where its iPhone dropped from the top five most popular smartphones for the first time in four years. However, Wall Street’s analysts expect the new AI-powered tools available on the next generation of the iPhone to encourage millions of Apple users to upgrade their existing handsets.

This quarter is unlikely to surprise, therefore, as the company prepares for its big launches in September, but analysts at Morgan Stanley believe Apple will forecast high-single-digit growth in its revenues on a year-on-year basis to $96.9 billion in the quarter to the end of September, with earnings per share of $1.62.