A big 'yikes' still hangs over the AI trade as Meta and Tesla report: What to watch this week

Move over Wall Street, because it's tech's time to shine.

After a busy first proper week of earnings that saw a relatively mixed picture out of the big banks, attention turns to the tech trade, where Meta ( META ), SpaceX ( SPCX ), and Tesla ( TSLA ) will all report results. With little economic data coming ahead of the Federal Reserve's late October meeting, the first batch of tech results will have our undivided attention.

After a relatively quiet Monday, the week's major earnings get properly underway on Tuesday with SpaceX and Netflix ( NFLX ), where co-CEOs Ted Sarandos and Greg Peters are likely to face questions (scrutiny or praise, we'll see) over recent layoff announcements. Wednesday will see results from Tesla and Meta, set to provide an early read on the state of the Magnificent Seven and the AI trade writ large.

Several of the so-called "prime" defense contractors — Northrop Grumman ( NOC ), Lockheed Martin ( LMT ), and RTX Corp. ( RTX ) — will also post their quarterly results, joined throughout the week by industrial heavyweight Honeywell ( HON ) and energy giant NextEra ( NEE ).

The quiet economic calendar will feature a smattering of housing and labor market data ahead of Friday's consumer sentiment readings from the University of Michigan, which are likely to capture the most attention.

When Meta reports third quarter earnings on Wednesday, Mark Zuckerberg and the company's other executives are likely to take myriad questions around one topic: the company's growing push into AI.

The focus for Meta recently has, of course, been the launch of Muse Spark, a personal AI agent product that set off waves of bulls claiming agentic workflows will revolutionize whole industries and of bears claiming, basically, "No one wants this."

The product immediately racked up millions of downloads, reaching the 5 million mark faster than OpenAI's ( OPAI.PVT ) ChatGPT, Anthropic's ( ANTH.PVT ) Claude, and SpaceX's Grok.

The product launch — one of Meta's largest announcements in years — has put the company " back on offense with AI, " argue Bank of America analysts Justin Post and Nitin Bansal, who have a Buy rating on the stock with an $810 price target.

"We think Muse and Model traction can drive multiple expansion with stock at 22x 2027 EPS," the analysts wrote.

There are some risks for Meta, Post and Bansal said. Muse downloads and activity could slow down, and Google could release a competitor consumer agent product that would take market share away from Meta.