The analysis from deVere Group’s Nigel Green comes as Microsoft and Alphabet (parent company of Google) report on Tuesday, Meta (parent company of Facebook, Instagram and Whatsapp) report Wednesday, and Amazon on Thursday.

He says: “Five tech companies have made up two-thirds of the S&P 500’s gains this year, so global investors are watching carefully the earnings reports of Big Tech this week.

“Of course, not all the titans will have performed to the same level, however, in general terms, tech remains surprisingly robust.

“Despite the sharp rise in the cost of capital over the last year, tech and other growth sectors have shared in the broader stock market gains since the start of the year.

“This is surprising to many market analysts.

“A rise in interest rates is often associated with weakness in growth stocks, as investors favour money market funds and other products that benefit from rate hikes.

“While some of the not-yet-profitable tech companies have been hit by this effect, in aggregate the quoted tech sector looks resilient.”

 A combination of factors is probably at work, according to the deVere CEO.

“First, the largest US tech stocks sit on large cash piles, reducing their need to borrow money to fund investment and growth.

“Second, falls in bond yields over the last six weeks, triggered by the Silicon Valley Bank crisis, have helped reduce funding costs for smaller growth companies.

“Third, in an era of weaker long-term GDP growth, investors may be searching out -and willing to pay a premium for- the sectors that will show earnings growth.”

Indeed, investor confidence in the sector remains strong.

Despite last year’s share price falls, the trailing price-earnings ratio on the NASDAQ index of US tech stocks is currently 25 times. This is down from the pandemic-era peak of 29 at the end of 2021, but it is still well above the 21 times at the end of March 2020.

On Monday, Nigel Green said in a media statement that investors around the world will be looking for three main factors from the tech giants this reporting season.

“Guidance will be critical as indicators show the economy is headed for a downturn and investors will be eager to know which companies are best-positioned to manage this.”

Guidance helps evaluate a company’s past performance in light of its future prospects.

“Cost-cutting measures and their efficacy will be poured over too. Have the recent mass lay-offs, following the mass hiring spree during and post Covid had an impact on the bottom line?”

“Plus, the AI (artificial intelligence) race will be closely monitored by investors.”

He concludes: “The total market cap of the top six tech companies in the US is an estimated $7 trillion. It’s a hugely critical sector and, as such, it’s surprising robustness will cheer markets and global investors.”