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Alphabet, Amazon, And The AI Boom

Market Update

02.02.2026

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What happened last week?

US 

  • The greenback continued its sharp decline 
  • Four of the Magnificent Seven companies revealed quarterly results 

Europe 

  • Europe’s initial public offering market had its busiest January ever 
  • ASML’s shares hit an all-time high on a wave of AI demand 

Asia 

  • SK Hynix’s profit more than doubled, setting a new record 

Why It Matters

The US dollar hit its lowest point since 2022 – and the American president seemed all for it, calling the slide “great” for the country’s businesses. The move reflected a broad market shift out of US assets, as geopolitical and trade tensions ramp up, sending investors into other markets – and into gold, which clocked yet another record high. 

Microsoft’s shares dipped lower, with investors feeling so unnerved by underwhelming cloud growth and a 66% surge in data-centre spending that even a 25% increase in profits didn’t steer them away from the “sell” button. Meta’s stock had an easier time: the firm beat expectations, with revenue up 24%. Still, it warned its spending could almost double this year as it leans hard into AI. Meanwhile, Tesla reported its first-ever full-year drop in revenue and announced plans to scrap two EV models to free up capacity for its Optimus humanoid robots. Finally, Apple reported a blockbuster quarter for iPhone sales – but warned that rising component costs could squeeze margins. 

ASML sailed past expectations with a blowout order book and a forecast for up to 19% revenue growth this year. The firm – which makes the machines that make advanced chips – then sweetened the deal for investors, with a chunky new share buyback program, a dividend boost, and plans to cut 1,700 jobs (around 4% of its workforce). 

Europe’s initial public offering (IPO) market is already having a year to remember, raising a quarter of 2025’s total haul in just the first 30 days and marking its strongest January ever. Analysts think the momentum can continue, thanks to buzzy listings like defence firm CSG’s €3.8 billion ($4.5 billion) debut, a logjam of IPO-ready firms held by private equity, and higher European stock valuations. 

SK Hynix smashed records last quarter: profit more than doubled and revenue jumped nearly 50%, lifted by AI-fuelled demand for high-bandwidth memory (HBM) chips. The Korean chipmaker – Nvidia’s key HBM supplier and Microsoft’s exclusive AI chip partner – has been extending its lead in a market that’s expected to grow by 25% a year through 2030. 

 

 

The Focus This Week: Alphabet, Amazon, And The AI Boom

This week, Amazon and Alphabet step into the spotlight as they open their books for investors. They won’t be the only Big Tech names grabbing attention: chip heavyweights AMD and Qualcomm are also set to share their latest quarterly numbers. 

Expectations are sky-high for Alphabet. Earlier this month, Google’s proud parent joined the exclusive club of companies with a market value above $4 trillion. That milestone speaks to investors’ growing confidence in its AI strategy. A newly announced partnership with Apple, glowing early reviews of Gemini, and a strong showing for Google’s in-house chips have all pushed Alphabet firmly into the AI front row. The payoff has been huge: the stock has more than doubled since April, making it the Magnificent Seven’s standout performer. Now it’s all about whether the firm can keep the good times going when it reports its latest results on Wednesday. 

Amazon’s story looks very different. Its share price has gone nowhere over the past year as investors weigh steady progress against lingering worries. Cloud growth has stabilised and retail margins have improved, but its AWS cloud business hasn’t shown the same AI-charged acceleration as its biggest rivals. Meanwhile, heavy data centre spending has been devouring free cash flow, while competition across both ecommerce and cloud just keeps nipping at its heels. The result is a stock that just hasn’t been keeping up with the market’s AI-driven enthusiasm. 

Over in chip land, TSMC set a boisterous tone in January. The world’s biggest contract chipmaker – which manufactures semiconductors for both AMD and Qualcomm – reported its highest quarterly profit ever. It’s outlook got investors really excited: TSMC now expects AI-chip revenue to grow roughly 55% a year through 2029, well higher than previously forecast. That paints a very rosy picture for AMD, which is already giving Nvidia a run for its AI-chip money, and for Qualcomm, which is looking to break into the market with new designs this year. 

The Week Ahead

  • Monday: China manufacturing PMI (January), US manufacturing PMI (January). Earnings: Disney, Palantir.
  • Tuesday: US job openings and labour turnover survey (December). Earnings: AMD, Amgen, PepsiCo, Pfizer. 
  • Wednesday: China services PMI (January), eurozone inflation (January), US Treasury refunding announcement, US services PMI (January). Earnings: Alphabet, Qualcomm, AbbVie, Eli Lilly, Novo Nordisk, Uber, ARM Holdings. 
  • Thursday: Eurozone retail sales (December), Bank of England interest rate announcement, European Central Bank interest rate announcement. Earnings: Amazon, Bristol-Myers Squibb. 
  • Friday: US labour market report (January), US consumer sentiment (February). Earnings: Philip Morris International. 

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