Next week on the stock market

As ever, all eyes will be on cloud growth at AWS when Amazon reports second quarter results. At the group level, net sales are expected to grow 7-11% year-on-year and reach $144-149bn. For AWS specifically, investors will want to see that the reacceleration of growth over the first quarter wasn’t a one-off. AWS has a leading market position in everything data related, it should be well placed to capture a huge chunk of the demand coming from the AI wave.

There was also a strong showing from both the e-commerce and advertising segments over the first quarter, something investors will be keen to see continue. But markets were a little unhappy with the second quarter profit guidance of $10-14bn, anything toward the top end of that range would be well received.

Microsoft is set to deliver fourth-quarter results next week. Investors will be hoping to see another strong showing from the cloud business, Azure. Analysts are looking for top line growth of 19.5% from Azure, which looks very achievable. Back in April, management said cloud-AI demand was outstripping supply. Despite a mammoth effort to build out compute, that supply/demand imbalance is likely to help underpin Azure growth for some time yet.

There is, of course, more to Microsoft than cloud. Eyes will be on how some of the software business lines are performing given the SaaS (software as a service) market has been softer of late. The rollout of tools like copilot is underway, but large-scale adoption will likely take some time.

Diageo served up an underwhelming set of results back in January, as the group measured a small revenue decline in the first half. Performance was held back by a weak showing in its Latin America and Caribbean region, where sales dropped 23% as customers consumed less and switched to cheaper alternatives. Because this region’s one of the group’s higher-margin markets, that saw operating profits fall more than 5% in the first half. An improvement in conditions here will be key to improving investor sentiment.

In next week’s results, we expect to hear that trading across Diageo’s other regions has fared better. Strong brand’s like Guiness, Tanqueray and Don Julio Tequilla should let the group push through price hikes, and help offset most of the impact of weaker volumes. Despite this, markets are still expecting to see revenue and operating profits fall 1% and 5% respectively.