Tech Earnings Preview: Meta, Tesla, Netflix

Big Tech's third-quarter earnings season gets going this week just as cracks are appearing in the AI trade that has carried the US market for most of the year.

Netflix reports after the close on Tuesday, followed by Meta and Tesla after the bell on Wednesday. The Nasdaq Composite fell 4.5% last week, its worst week since June, as a sell-off in chip stocks spread across the AI complex.

The AI Trade Hits an Air Pocket

The question hanging over tech has shifted from who wins the AI race to who pays for it.

Big Tech is spending at a record pace, with Meta alone guiding for $130-145bn of capital expenditure this year, up from $72bn in 2025, and investors are increasingly asking when that outlay will show up in profits. Chip stocks bore the brunt last week, with AMD, Intel, Micron and Broadcom all falling more than 4% on Friday, even after TSMC CEO C.C. Wei said demand was "extremely robust" with no sign of a slowdown.

A Market Carried by a Handful of Giants

The sell-off matters more than usual because so few stocks have been doing the heavy lifting.

At the end of September the S&P 500 was within 1% of a record high, yet the equal-weight version of the index was on course for a seventh straight weekly decline, a run only seen twice before, in 2002 and 2022. Around 52% of S&P 500 stocks were trading below their 200-day moving average at the time, leaving the index reliant on a narrow group of mega-cap tech names.

Last week showed the flip side of that concentration. The Nasdaq 100 fell 5.5% while the equal-weight S&P 500 edged higher, helped by a rotation into healthcare and consumer staples, so if this week's results fail to reassure there is little underneath the leaders to hold the index up.

Meta Platforms (META)

Meta's core ad business is firing, with Q2 revenue up 28% as AI-driven targeting lifted both ad volumes and prices, and Mark Zuckerberg says "AI is accelerating our core business today." The problem is the bill, with Q2 costs up 55% and the EPS miss that quarter showing how quickly spending, plus $3.6bn of legal and severance charges, can swamp revenue growth.

Tesla (TSLA)

Tesla's car business is still shrinking, with Q3 deliveries of 486,532 down around 2% on a year earlier despite beating forecasts, and the shares were down more than 20% this year as of Friday's close. The bull case now rests on autonomy, with more than 300 Cybercabs running in Austin and cumulative unsupervised robotaxi miles past 1 million, but heavy spending on AI and new factories turned free cash flow negative in Q2, so investors need a clearer path to revenue.

Netflix (NFLX)

Netflix has guided for around 12% revenue growth in Q3, and the shares are down about 25% this year, leaving them more than 40% below their 52-week high. After walking away from Warner Bros in February with a $2.8bn break-up fee, it is leaning on advertising, targeting around $3bn of ad revenue this year, and on cost cuts, announcing roughly 1,000 job cuts last week. The risk is that the newly combined Paramount and Warner Bros becomes a tougher rival for content and talent just as growth cools.

US Tech 100 Bounces Off Key Support

The US Tech 100 has bounced off a key support zone heading into this week's results, with early signs that the selling is running out of steam.

The index fell as much as 7.4% from its early-October peak of 31,366 to a low near 29,040, stopping just above the 28,800-28,900 zone that held the August and September dips and sits close to the 61.8% Fibonacci retracement of the rally from the late-July low.

It had rebounded around 1.5% to near 29,600 in early Monday trade, forming a bullish engulfing candle on the 8-hour chart right at support. RSI has made a higher low while price made a lower low, a bullish divergence that points to fading downside momentum.

A move back above the 38.2% retracement around 29,700 would put the 23.6% level near 30,350 in focus, followed by the 31,000 area. A break below 28,800 would take out both the support zone and the 61.8% level, opening the way towards 28,000.

Source: SpreadEx | US Tech 100, 8-Hour Chart