AI Stocks Face Earnings Gut Check As Spending Jitters Mount
Technology company earnings are important this week. Investors are worried about whether big investments in artificial intelligence (AI) will pay off, especially after CoreWeave (CRWV) shares fell last week. AI stocks could move up or down based on what company leaders say during earnings reports. Companies reporting include Space Exploration Technologies (SPCX), Meta Platforms (META), Texas Instruments (TXN) and Lam Research (LRCX).
Most of SpaceX's AI-related revenue comes from renting computing power in large data centers to other companies. It earns less from licensing AI models or selling software subscriptions. What SpaceX says about the prices it charges to rent graphics processing units (GPUs), which are chips used for AI, and the terms of its rental contracts could affect other AI stocks.
Alphabet (GOOGL) is a new customer renting data center computing power from SpaceX. SpaceX recently said that Google agreed to pay $920 million each month from October 2026 through June 2029 for computing capacity. The deal is expected to put pressure on Google's profit margins when Alphabet reports earnings on Oct. 28. Alphabet also has a large, long-term investment in SpaceX.
For Meta Platforms, investors will look for comments from company leaders about planned spending on equipment and other capital costs in fiscal 2027. Meta stock has risen recently on positive views of its new "Muse" AI model and its efforts to sell AI products to businesses through its push into the business market.
Will Hyperscalers' Free Cash Flow Turn Positive?
Most observers expect the major cloud and technology companies, including Meta, Amazon.com (AMZN), Microsoft (MSFT), Google and Oracle (ORCL), to confirm their plans to spend huge amounts on AI. The big question is whether their revenue will grow fast enough next year to cover these costs. If it does, some companies could once again have positive free cash flow, which is the money left after a company pays its expenses and makes investments.
One thing is clear: investors are becoming more selective about AI stocks. They are cautious about companies with rapidly growing AI-related debt and financing problems, such as CoreWeave.
Many semiconductor companies have also been hit hard by recent stock market declines.
The Philadelphia Semiconductor Index, known as SOX, fell 10% last week. The index more than doubled from late March through June 22 and had its best-ever quarter during the quarter ending in June. But it is now 23% below its all-time high, according to a report from Bespoke Investments.
Nvidia (NVDA) shares have fallen 6% in October. Memory chip makers such as Micron Technology (MU) have fallen even more. Investors are worried about competition from China and pressure on chip prices.
Nvidia is holding its GTC conference in Berlin this week. Chief Executive Jensen Huang is expected to give a keynote speech on Wednesday.
Many AI stocks have had big price swings in 2026. Software stocks fell early in the year but later recovered. The iShares Expanded Tech-Software Sector ETF (IGV), an index fund that tracks the software industry and includes Microsoft and many large software companies, is about unchanged for the year. It had been down nearly 30% in May.
AI Stocks: October's Losers
After rising sharply, Twilio (TWLO) shares have fallen 16% in October.
Some of October's biggest stock market losers have been companies that make optical networking technology for data centers. These companies include Lumentum (LITE), Coherent (COHR), Credo Technology (CRDO) and Applied Optoelectronics (AAOI).
Other stocks that have fallen include Arista Networks (ANET), Celestica (CLS), Akamai Technologies (AKAM) and Hewlett Packard Enterprise (HPE). Celestica, which makes products for other companies, will report earnings on Oct. 27. Google has become its biggest source of growth.
2026 AI Stocks Scorecard
| Artificial Intelligence Stocks | |||
|---|---|---|---|
| 2026 gain/loss as of Oct. 16 | Q3 gain/loss | ||
| Advanced Micro Devices | +147% | +5% | |
| Alphabet | +9% | -4% | |
| Amazon | +8% | +5% | |
| Apple | +26% | +15% | |
| Arista Networks | +35% | +20% | |
| Broadcom | -5% | -7% | |
| Ciena | +42 | -28% | |
| Cloudflare | +50% | +42% | |
| CoreWeave | -14% | -12% | |
| Credo Tech | +18% | -22% | |
| CrowdStrike | +94% | +39% | |
| Datadog | +82% | +6% | |
| Lumentum | +123% | +13% | |
| Meta Platforms | +7% | +29% | |
| Microsoft | +9% | +37% | |
| Nvidia | +15% | +14% | |
| Oracle | -34% | -6% | |
| Palantir | +5% | +60% | |
| Palo Alto Networks | +85% | +16% | |
| Salesforce | -9% | +46% | |
| Shopify | +5% | +30% | |
| Snowflake | +40% | +34% | |
| Vertiv | +27% | -27% |