This week, the financial reports of Amazon, Apple, Meta, and Microsoft in Mag 7 are coming in.Due to the disappointing financial reports of Tesla and Alphabet in Mag 7 last week, leading to a sharp decline in US tech stocks, the market sentiment has become tense. If the financial performance of other members of Mag 7 this week is poor, it may exacerbate the pullback in the US stock market.Microsoft will release its financial report on Tuesday, Meta will release theirs after Wednesday's market close, while Apple and Amazon will release theirs after Thursday's market close.<h2>Mag 7 Continues to be the Largest Contributor to S&amp;P 500 Earnings Growth</h2>Bank of America predicts that over 1/3 of the earnings of the S&amp;P 500 index will be announced this week, mainly because these four tech giants account for nearly 20% of the S&amp;P 500 index weight.The second-quarter earnings of Mag 7 are expected to grow by 30% year-on-year. The two companies releasing financial reports this week, Meta and Amazon, are expected to be among the largest contributors to the earnings growth of the S&amp;P 500 index.However, Alphabet's financial report last week showed that strong earnings growth may not be enough for Wall Street.<h2>Alphabet's Earnings Exceeded Expectations Last Week, But Wall Street Was Not Impressed</h2>Compared to earnings, investors will pay more attention to the capital expenditures of Microsoft and Amazon in this financial report.Alphabet's financial report last week showed a 28% growth in the second quarter, exceeding expectations. However, the massive investment by Google in AI infrastructure, leading to almost doubling of capital expenditures, raised market concerns, causing Alphabet's stock price to plummet.Although Alphabet's CEO Pichai once stated:<blockquote>&#34;AI costs are high, but the risk of underinvestment is greater.&#34; Google may have invested too much in AI infrastructure, mainly including the purchase of NVIDIA's GPUs. Even if the AI hype slows down, the data centers and computer chips purchased by the company can be used for other purposes. For us, the risk of underinvestment is far greater than the risk of overinvestment.</blockquote>However, Wall Street has doubts about the returns that excessive investment in AI can bring, so besides profits, the AI-related expenditures of Meta and Amazon will be a focus of market attention this time.CFRA analyst Angelo Zino stated that the capital expenditure rate of tech giants is indeed increasing, but the increase in capital expenditures should not be seen as a disappointing outcome, as it is healthier than increasing operating expenses.Bank of America analysts pointed out that the upward adjustment of legal and capital expenditures in the second quarter of Meta is still a risk factor.<h2>Will the Rotation in the US Stock Market Continue?</h2>The timing of tech giants releasing new financial reports coincides with the pullback in the US stock market. Investors are flocking out of tech stocks and into small-cap stocks, as Wall Street expects high-risk assets like small-cap stocks to benefit from the upcoming rate cuts.Analysts at Wedbush also stated that there is no need to worry too much about tech giants increasing capital expenditures, and believe that as Wall Street better digests the performance of the entire tech industry, the sell-off of tech stocks will be temporaryAngelo Zino also added that although there may still be further rotation in the US stock market, the pullback in tech stocks may be temporary, which could present &#34;a very good opportunity for long-term investors&#34;

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Last week, the financial reports of Tesla and Alphabet caused a round of tech stock sell-offs. This week, the US stock market is bracing for the financial reports of the Mag 7: Amazon, Apple, Meta, and Microsoft, and the market has already started to tremble

- This week, major tech companies like Amazon, Apple, Meta, and Microsoft are set to release their earnings reports, following Tesla and Alphabet's disappointing results last week, which caused a tech stock slump in the US market, leading to increased market tension.
- Microsoft will report earnings on Tuesday, Meta after Wednesday's close, while Apple and Amazon will announce theirs after Thursday's close. The tech giants within the Mag 7 are expected to significantly impact the S&P 500 index's profit growth, with the second-quarter earnings projected to increase by 30% year-on-year.
- Investors are particularly focused on Microsoft and Amazon's capital expenditures this earnings season, following Alphabet's strong profit growth but concerns over excessive AI infrastructure investments leading to a stock price drop. Market attention shifts to AI-related expenses for Meta and Amazon amid Wall Street's scrutiny over potential returns from heavy AI investments.

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The resurgence of the US stock market? The "Seven Sisters" are coming with a flurry of financial reports, with AI capital expenditure becoming a focal point