The Tech sector has continued to be a key driver of overall earnings growth in the ongoing Q4 earnings season. But a couple of less-than-reassuring trends have also came to the forefront this earnings season about the sector.

First, the cloud computing leaders appeared to be faced with some headwinds to their growth momentum. We saw that in the results from Amazon (AMZN Quick QuoteAMZN - Free Report) whose Amazon Web Services remains a leader in the space. Alphabet (GOOGL Quick QuoteGOOGL - Free Report) and Microsoft (MSFT Quick QuoteMSFT - Free Report) also failed to impress with their cloud results. In fact, even Advanced Micro Devices (AMD Quick QuoteAMD - Free Report) had issues in its datacenter business.

Secondly, the issue of Amazon, Alphabet and Microsoft spending ever-higher capex amounts on building out their artificial intelligence infrastructure has become even more front and center following the unveiling of China’s DeepSeek model that reportedly needed a lot less money to build. All of these companies stood behind their raised capital allocations and described them as essential to their long-term competitive positioning. But investors remain wary of this spending trend given the uncertain payoff on these outlays, particularly in the wake of the DeepSeek episode.

In terms of the Q4 earnings season scorecard, we now have results from 370 S&P 500 members or 74% of the index’s total membership. Total earnings for these companies are up +12.1% from the same period last year on +5.6% higher revenues, with 77.8% beating EPS estimates and 64.6% beating revenue estimates.

This a notably better performance from these companies relative to what we have seen from the group in other recent periods, particularly in terms of the growth pace.

For more details about the ongoing Q4 earnings season and evolving expectations for the coming periods, please check out our weekly Earnings Trends report >>>>>Breaking Down the Current Earnings Outlook