Heading into Nvidia’s earnings next Wednesday, expectations are being shaped by two developments over the past month: AI models are showing clearer utility, and the hyperscalers guided to a bigger infrastructure buildout. During that time, Nvidia growth estimates for CY26 have increased from 50% to 55%. The demand story is well understood, yet NVDA shares are up only about 5% over the past month versus the Nasdaq roughly flat. The disconnect between the bullish updates and modest share price increase highlights that the real debate is what growth looks like in 2027 and 2028. Ultimately, investors have to decide what inning of the AI buildout we are in, if it's the 5th inning, 2027 growth should look more modest, and if it is the 2nd inning, which I believe, Nvidia’s growth outlook over the next several years remains robust.

Despite Cloud and Search revenue blowing past expectations, shares of GOOG traded down about 2% in after-hours trading. The disconnect appears driven by optics around a much larger-than-expected CY26 capex ramp, a sharp step-up in depreciation, and some perceived variability in near-term cloud growth tied to supply. Google and Meta are the two best examples of companies translating AI tech into better-than-expected revenue growth. Lastly, that huge step up in capex spend this year underscores we're still early in AI.

Shares of AAPL are not getting the love they deserve, up only 1% on impressive December results and guidance. I would have expected them to be up 5% or more after the report. I believe the muted stock reaction is largely because investors want more clarity on when and how AI will impact the business. History suggests Cook will deliver the AI goods in the form of the first must have AI devices, likely starting mid to late this year. In the meantime, investors can sleep well at night knowing Apple’s customers remain loyal.

Meta’s December quarter results and guide provided the latest evidence that AI is materially accelerating the business at scale, boosting shares by 6% in after hours following a 5% move higher over the past week. The outlook for revenue growth was impressive, borderline hard to believe, calling for 33% growth at the high end of the range, an acceleration from 24% in the just reported December quarter. If they deliver on projections, revenue growth would be the highest since September of 2021, off a sales base that has about doubled over the past five years, pushing the law of large numbers to the side. Additionally, AI is improving engagement across the Family of Apps, up 7% y/y to 3.6B daily users. In September of 2024, DAU growth was 4.8%, representing faster growth off a bigger base. Lastly, Zuckerberg hinted that more products will come in the months ahead from Superintelligence Lab, which we believe will include a new foundational model.

Tesla’s quarter was met with shares up 2% in after hours, follwing shares being down 0.5% over the past week, suggesting investors were modestly impressed by the company’s progress in autonomy. I believe the stock action understates the progress the company is making in physical AI, and expect a breakthrough in FSD in the next one to two years, which should have a domino effect of accelerating progress in Robotaxi. My evidence of this progress includes recent personal observations of FSD, the company now reporting FSD subscriptions, and the company discontinuing Model S and X, about 2% of sales, in favor of using production lines to ramp Cybercab.

Tesla will report December earnings on Wednesday, January 28th. Since reporting deliveries on January 2nd, shares of TSLA are up 1%, in line with the Nasdaq. The three most important topics on the call are the timing of expanding safety-driver-free Robotaxi service to new cities, high-level commentary on deliveries in 2026, the first full year without the tax credit, and margin expectations this year, including the impact of the lower-priced Model 3 and Model Y. While FSD, Optimus, and timing of Cybercab ramp are top of mind, there is likely little new Elon will say to change how investors are gauging the success of those segments. In the end, I expect shares to move higher throughout the year as investors gain confidence that Tesla remains best positioned to capitalize on physical AI.

Over the past three months, shares of GOOG are up 31% vs the Nasdaq up 4%, as Google’s technical chops in AI have been validated. Strengthening AI products have translated into higher Street expectations for Search growth in December, increasing from 12% two months ago to 14%. I believe the segment will end the quarter up 15% based on our survey of sponsored ads within AI Overviews and AI Mode. That upside should flow into CY26, and provide further upside.