Next week will centre on a rush of technology earnings from Japan and the US, with the outlook for returns on AI investment and developments in semiconductor and storage stocks becoming key market focuses. The BOJ and US PCE and GDP data, along with the outcome of the US midterm elections, are also likely to be key to stock selection.
In Japan's market next week, the Nikkei Average is expected to be around ¥2,631 lower, while corporate earnings in Japan and overseas and monetary policy in Japan and the US will provide guidance as concerns over the profitability of AI investment persist. The month-end reshuffling of TOPIX constituents could also create supply-demand volatility. The central scenario for the BOJ's policy meeting is expected to be no change in policy, but attention will focus on how the bank explains any revisions to its inflation outlook and the conditions and timing for additional rate hikes.
A series of earnings reports will test the capital spending cycle for AI semiconductors, manufacturing equipment and storage. Developments at Advantest, Tokyo Electron and Lasertec are likely to affect views on the sustainability of AI demand, orders and profit margins. Attention will also focus on the earnings outlooks for Hitachi, NEC, Keyence, Komatsu and Canon.
In the US market, earnings from AI-related companies and monetary policy are expected to have a major impact on stock valuations, while developments at Oracle AI World will also be watched. Among hyperscaler-related companies, cloud growth and capital spending plans at Alphabet, Microsoft and Amazon will be key focuses. Increased investment could boost AI infrastructure, while delays in generating cash could become a concern.
Related areas attracting market attention include data-centre power and cooling demand, AI regulation and developments in digital-asset markets. Policy debates ahead of the US midterm elections could affect data-centre investment and the development of AI infrastructure.