3 Key Things to Monitor When Tech Giants Report Earnings
2026-10-24 09:45
•Marc Guberti •The Motley Fool
•••••• •••••••• Axe Cap view
What SA Investors Should Watch as Global Tech Giants Report Earnings
Big US tech's AI investment spree matters to South African markets via currency and Naspers exposures.
US tech giants like Alphabet and Microsoft are doubling down on AI, pouring billions into data centers and chips. Alphabet’s Google Cloud growth of 82% year-over-year shows AI investments can drive revenue, but Amazon’s heavy cash outflows remind us these are expensive bets. For South Africans, the question is whether this innovation cycle will strengthen or weaken the rand. A stronger dollar driven by US tech resilience can pressure the rand and weigh on our exporters. Meanwhile, Prosus and Naspers, holding massive stakes in global tech, stand to benefit if AI investments convert into lasting profits. However, if growth stalls or US rate hikes continue, the rand could suffer and local tech proxies may disappoint. Watch USD/ZAR closely—tech earnings are a key pulse for the rand's direction. this is just our opinion and not financial advice
We recommend a cautious buy on Naspers and Prosus, given their AI-linked growth prospects, while watching rand exposure carefully. Hedge rand risk somewhat by considering more defensive financials like FirstRand or Standard Bank for balance.
- Naspers
- Prosus
- USD/ZAR
- FirstRand
- US Federal Reserve maintaining or raising interest rates, strengthening USD further
- AI investments failing to translate into sustainable earnings growth, reducing appetite for tech-linked stocks
6/10
As major tech companies like Alphabet, Microsoft, and Amazon report earnings, investors should focus on three key metrics: whether hyperscalers will continue ramping up AI capital expenditures, if these investments translate into substantial revenue growth rates, and management guidance on future AI spending and profitability. The sustainability of massive AI investments and their financial returns will determine the viability of the AI investment thesis.
Our take is based on reporting first published by The Motley Fool.