Mega-cap earnings beat expectations as inflation cools, but ai spending surges wildly—because why save money when you can fund more hallucinating models

This week's market wrap was dominated by mega-cap earnings, inflation data, and AI-driven spending. Major companies such as Apple, Amazon, and Microsoft reported their quarterly earnings, providing insight into the current state of the tech industry. The US inflation rate was also released, showing a slight increase to 2.5% in January, driven by rising food and energy costs. Meanwhile, companies like NVIDIA and Alphabet are investing heavily in artificial intelligence, with NVIDIA's AI-driven revenue increasing by 41% year-over-year. The spending on AI is expected to continue, with a projected growth of 20% in the next year. The market reacted positively to the earnings reports, with the S&P 500 index rising by 1.5% on Friday. The combination of strong earnings and rising inflation has significant implications for the economy, as the Federal Reserve considers its next move on interest rates. The tech industry's performance is being closely watched, as it accounts for a significant portion of the US market.