Institutional Insights: Goldman Sachs - Trading Notes Into MegaCap Prints
Mega-Cap Tech Earnings Preview: Generals Set the Tone
A major slate of mega-cap tech earnings is ahead, with GOOGL roughly 6% of the S&P 500, MSFT 5%, AMZN 4%, and META 2.5% all reporting Wednesday post-close, followed by AAPL at roughly 6% on Thursday.
Against the backdrop of today’s market wobble — likely a mix of technical burn-off after the momentum chase, the OpenAI/WSJ story, and some sell-the-news earnings reactions — investors will be watching this group closely. The key question: can the “Generals” stabilize sentiment and set a constructive tone for broader market risk appetite into May?
High-Level Positioning / Flows
Over a dizzying 13-trading-session stretch to start April, mega-cap tech flipped from technically oversold to technically overbought. The 14-day RSI of our Mega-Cap Tech basket was below 30 on 3/30, then reached 74 by 4/17.
From our seat, the sharp rerating higher was driven by a combination of:
Technical factors, including CTA index buying and institutional covering of macro hedges.
Fundamental re-acceleration of the AI trade, with conviction clearly reinvigorated in April.
Key catalysts cited by investors include:
AMZN’s shareholder letter.
INTC’s print and guide.
Another wave of high-profile AI partnerships.
Rising enterprise adoption rates.
Confirmation of ongoing supply bottlenecks.
An improved geopolitical backdrop.
Recent desk flows across the mega-caps have skewed better to buy. Demand has stood out most clearly in AMZN, where buying accelerated after Jassy’s shareholder letter, and MSFT, where flows have felt more like long-only investors managing underweights as the stock recovered from its lows. We have also seen strong demand in AVGO and NVDA, though both report off-cycle.
Given the sharp rallies, recent inflows, elevated expectations, and the difficulty of getting paid on a T+1 basis around other crowded TMT longs this quarter — including ASML, TSM, NFLX, SPOT, and Hynix — it does not feel controversial to say that the positioning bar, in aggregate, is high across the reporting mega-cap group.
What the Market Will Be Looking For
Broadly, investors will be looking for:
Strong top-line beats
These are widely expected, but the market will want confirmation that demand for compute, cloud infrastructure, and AI applications remains robust.Continued aggressive AI investment
CapEx and infrastructure commentary remain central to the bull case, particularly for the hyperscalers.Evidence of operating leverage
The key swing factor is whether top-line upside is beginning to flow through to the bottom line, or whether AI-related spending continues to absorb incremental revenue growth.Hyperscaler CapEx trajectory into 2027
MSFT’s CapEx commentary will be especially important given the timing of its fiscal year. Any color on FY27 spending could meaningfully shape investor views on the durability and slope of hyperscaler AI infrastructure investment.
Single-Stock Need-to-Knows
GOOGL
Positioning: 9.5 / 10
GOOGL remains very well-owned, though the pace of incremental inflows appears to have slowed. Expectations have moved higher into the print.
Key bogeys:
GCP growth now expected closer to the high-50s / 60% range, versus Street expectations in the mid-50s.
Search growth expected in the high-teens, versus GIR at 17.5%.
Investors expect management to reiterate its CapEx outlook.
Options are implying roughly a 5% post-earnings move.
AMZN
Positioning: 8.5 / 10
Positioning has recently moved higher, with a clear “up arrow” following the wave of inflows we have observed over the past several weeks.
Key bogeys:
AWS growth expectations have moved higher, with the buy-side bogey closer to 30%+, versus GIR at 26% year-over-year.
Commentary on Trainium, AI workloads, and strategic AI partnerships will be closely watched.
Investors will focus on whether AWS acceleration is translating into margin leverage or being reinvested into capacity.
Options are implying roughly a 7% move.
META
Positioning: 7.5 / 10
Sentiment has improved over the past quarter, though from a lower base. The MuseSpark release helped rebuild confidence by demonstrating more tangible progress around the company’s AI strategy.
Key areas of focus:
Opex clarity, with investors looking for signs of operating leverage.
Ad outlook into 2Q, particularly the magnitude of any sequential deceleration.
Commentary on AI-driven engagement, monetization, and product roadmap.
Options are implying roughly a 6.5% move.
MSFT
Positioning: 5.5 / 10
While we have seen recent buying, flows have felt more like risk-management-style covering of underweights than a broad-based return of bullish conviction. Sentiment remains notably bearish, particularly among the hedge fund community.
Key bogeys:
Azure growth expected to print roughly stable in the quarter and guide, around high-30s year-over-year constant currency.
Copilot / M365 commentary remains important, particularly around adoption, monetization, and customer willingness to pay.
CapEx commentary will be the most important focus, especially any discussion of the FY27 trajectory.
Options are implying roughly a 6.5% move.
AAPL
Positioning: 7 / 10
There is more apathy around AAPL than the other mega-cap names. The stock has largely sat on the sidelines of the AI trade and has traded with more defensive characteristics. This is reflected in options, which are implying only about a 3% post-print move.
Strength is expected to be driven by:
Services growth, expected to run at 13–14% year-over-year.
Continued strength from the iPhone 17 lineup.
Other focal points:
Component cost pressures.
China recovery.
Apple Intelligence roadmap and adoption.
Potential CEO transition commentary.
Prime Data
GS Prime data shows the long/short ratio across the Mag 7 in the 88th percentile on a three-year lookback. This reinforces the view that positioning is elevated across the group, even if stock-level sentiment varies meaningfully — with GOOGL and AMZN more crowded, META and AAPL moderately owned, and MSFT still relatively under-owned versus its historical role as a core mega-cap long.
Bottom Line
The setup into mega-cap earnings is strong but demanding. Positioning has rebuilt quickly, expectations have moved higher, and the AI trade has regained momentum. For the group to work, investors likely need more than just headline beats — they need confirmation that AI-driven demand remains durable, CapEx is disciplined or at least well-justified, and revenue upside can increasingly translate into earnings power.
In short: the market is looking for the Generals to validate the April rerating and carry risk appetite into May.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!