Equities Update: Meta, Alphabet, Microsoft, Aston Martin, Next…

Alphabet, Microsoft and Meta earnings preview – “results should demonstrate whether AI investments are translating into genuine revenue growth”

Chris Beauchamp, Chief Market Analyst at IG: “Three of the tech giants report tonight and the results should demonstrate whether AI investments are translating into genuine revenue growth as the market expects.

“Alphabet’s key test will be proving AI Overviews are driving engagement without cannibalising profitable search traffic. Cloud momentum looks encouraging, with the backlog growing strongly. CapEx guidance remains heavy, but necessary to maintain competitive advantage. Shares have had a strong run this year, and at these levels any disappointment could trigger profit-taking.

“Microsoft’s fiscal first quarter should show Azure growth remaining robust. A wave of new contracts signed recently validates demand for AI infrastructure. If Cloud margins hold up and Copilot adoption continues accelerating, the elevated spending looks justified by the revenue opportunity.

“Meta’s results will focus on whether AI-driven ad conversion gains can offset rising R&D costs. Operating margins are slipping slightly as investment ramps up, but early signs suggest the spending is working. CapEx guidance for next year will be aggressive, yet the company’s track record suggests they know how to monetise infrastructure spending.

“All three beat estimates habitually, and with AI moving from deployment to monetisation phase, there’s good reason to expect they’ll deliver again. The spending is real, but so are the early revenue wins.”

Aston Martin hits the brakes amid tariff turmoil

Adam Vettese, market analyst for eToro says: “Aston Martin’s Q3 results highlight a continuation of recent struggles, with wholesale volumes down, revenue falling and losses widening. Demand remains subdued in key regions like North America and China, impacted by tariffs, macroeconomic conditions, and specific model delays. The company’s gross margin has deteriorated sharply, down nearly 9 percentage points, reflecting weaker sales mix and higher costs. Despite launching new derivatives, including the Valhalla, core models like Vantage S and DBX S are still ramping up, leaving the company delays in expected deliveries.

“The financial outlook has been revised downward, and the company no longer expects positive free cash flow in H2 2025. Market sentiment is understandably cautious, as shares traded significantly lower since a profit warning earlier this month despite no major movement this morning.

“While management anticipates some sequential improvement in Q4 driven by new model deliveries, persistent macroeconomic headwinds, high inventory levels, and geopolitical uncertainties pose significant risks. Overall, Aston Martin faces a challenging near-term outlook, with the potential for future share price recovery dependent on how swiftly demand can bounce back and new models gain traction.”

Next’s strong sales suggest Britain’s cost-of-living crunch may be easing

Mark Crouch, market analyst for eToro says: “Next seems to have missed the memo on Britain’s slowdown. The British retail giant has nudged up profit guidance for the fourth time in eight months, after third-quarter full-price sales rose an impressive 10.5%. While rivals have spent the year tripping over rising costs and cautious consumers, Next has managed to glide serenely through it all.

“Even more striking is the message behind the numbers. This is a retailer whose shares are up over 40% this year and whose leadership still finds room for a special dividend come January 2026. Either Lord Wolfson and his team have cracked the code of middle-England spending, or they’re quietly signalling that the cost-of-living crisis has passed its peak.

“Whatever the case, if this is what a “weaker economy” looks like, investors may need to redraw their assumptions. Next’s resilience hints at something deeper and is showing the company reads its customers better than the economists do. And for all the talk of household financial strain, the tills at Next are still ringing loud enough to drown out the gloom.”