The current earnings season heavily features artificial intelligence and major tech companies, with experts predicting a shift in market dynamics for 2025 and 2026. While AI will continue to drive significant growth, a broader range of companies is expected to contribute to market gains in the coming years, with S&P 500 profits projected to increase by about 7% for the three months ending December 2024. However, a new affordability drive introduced by Donald Trump poses a potential risk, threatening to overshadow the focus on AI stock earnings. In a significant strategic pivot, Meta is reallocating resources from its metaverse ambitions to focus on AI hardware, wearables, and phone features. This shift includes cutting over 1,000 jobs, approximately 10% of its Reality Labs division, which has incurred losses exceeding $70 billion since early 2021. Meta's future metaverse efforts will now concentrate on mobile devices and existing apps, reducing investments in VR headsets and closing three in-house VR game studios to instead support third-party developers. AI's influence extends beyond consumer tech, profoundly impacting defense and industry. The US Army is actively developing GUARD software, a project awarded a $6.3 million agreement to Advanced Technology International Inc., designed to detect and analyze unpredictable behaviors in AI-enabled autonomous systems for military reliability. Joe Lonsdale, co-founder of Palantir, highlighted how tech giants are bolstering US defense capabilities with AI amidst rising global threats. Innovations in AI hardware are also making advanced capabilities more accessible. At CES 2026, Phison Electronics showcased its aiDAPTIV+ technology, which uses high-capacity NAND flash to expand GPU memory, allowing powerful AI tasks to run on standard PCs. This innovation significantly reduces DRAM requirements, making AI work more affordable and efficient. Meanwhile, agentic AI for autonomous media buying was also a notable feature at CES 2026, with Nvidia maintaining a strong presence. The transformation brought by AI is global, with new technologies like generative AI, edge AI, and quantum machine learning reshaping sectors such as healthcare, finance, and logistics. Investment firms like AlphaGainium are leveraging AI with a new platform launched on January 13, 2026, to achieve faster returns through data-driven strategies in various markets. Public engagement with AI is also growing, as evidenced by an AI class for parents held at the Peter White Public Library on January 12, 2026, reflecting a broader societal interest in understanding this evolving technology. Experts advise investors to join the AI trade, citing the rapid growth of data centers.
Key Takeaways
- AI and big tech stocks currently dominate earnings, but market diversification is expected in 2025-2026.
- Donald Trump's new affordability drive poses a significant risk to AI stock earnings.
- Meta is shifting focus from its metaverse efforts to AI hardware, cutting over 1,000 jobs in Reality Labs.
- Meta's Reality Labs division has lost over $70 billion since early 2021, prompting a pivot to mobile-focused metaverse plans.
- The US Army awarded Advanced Technology International Inc. a $6.3 million agreement to develop GUARD software for detecting unpredictable AI behaviors in autonomous systems.
- Joe Lonsdale, co-founder of Palantir, emphasized AI's role in strengthening US defense capabilities against global threats.
- Phison Electronics' aiDAPTIV+ technology, showcased at CES 2026, lowers AI hardware costs by reducing DRAM requirements for large language models.
- Nvidia maintained a strong presence at CES 2026, engaging with ad tech and agency companies regarding agentic AI.
- New AI technologies, including generative AI and edge AI, are transforming industries like healthcare, finance, and logistics globally.
- AlphaGainium launched an AI-driven trading platform on January 13, 2026, aiming for higher investment returns through data-driven strategies.
AI and Big Tech Dominate Earnings Now But Change is Coming
The current earnings season heavily relies on artificial intelligence and big tech stocks. However, this trend is expected to shift in 2025. Experts predict that earnings growth will slow down in the second half of the year, possibly causing investors to move money into different sectors. Despite this, AI will likely remain a key factor in the stock market. Companies investing in AI with strong capabilities will probably perform well. Investors should get ready for a more unpredictable market in 2025.
AI Still Drives Earnings But Market Will Broaden in 2026
The current earnings season continues to focus on artificial intelligence. Bank of America analysts expect major tech stocks to deliver most of the earnings growth again. However, a broader group of companies will likely contribute to market gains in 2026 as the economy stays strong. Investors may also start moving away from riskier AI investments. Bank of America predicts S&P 500 profits for the three months ending in December will increase by about 7% from 2024 levels. Corporate guidance is the most positive since 2021.
Trump's Affordability Drive Poses Risk to AI Stock Earnings
AI stocks are expected to show strong earnings this season. However, President Donald Trump recently introduced a new affordability drive that poses a significant risk. This initiative threatens to overshadow the focus on artificial intelligence during the current earnings period. These two powerful forces are now on a collision course in the stock market.
Meta Shifts Focus to AI Hardware Cuts Metaverse Jobs
Meta is changing its focus to AI hardware and reducing its metaverse efforts. This shift includes layoffs within the Reality Labs division, which has lost over $70 billion since early 2021. Meta's future metaverse plans will now concentrate on mobile devices and existing apps. Chief Technology Officer Andrew Bosworth stated that teams and resources are moving to mobile to speed up user adoption. The VR division will operate as a leaner organization with a more focused plan for long-term success. Do not expect a Quest 3 follow-up anytime soon.
Meta Cuts Over 1,000 Jobs Shifting to AI From Metaverse
Meta Platforms Inc. is cutting over 1,000 jobs from its Reality Labs division. This move shifts resources from virtual reality and metaverse products towards AI wearables and phone features. Chief Technology Officer Andrew Bosworth announced the layoffs, affecting about 10% of Reality Labs' 15,000 employees. Reality Labs has lost over $70 billion since 2021, as the metaverse vision did not take off as CEO Mark Zuckerberg expected. Meta will now focus its metaverse efforts on mobile devices and will also reduce investments in VR headsets. The company is closing three in-house VR game studios and will instead invest in third-party developers.
Army Develops Software to Detect Unpredictable AI Behaviors
The Army is developing new software to find and analyze unpredictable behaviors in artificial intelligence. This project aims to make sure AI-enabled autonomous systems are reliable for future military operations. Army Contracting Command awarded Advanced Technology International Inc. a $6.3 million agreement for this technology. The project, named Generative Unwanted Activity Recognition and Defense or GUARD, will create AI "risk profiles." GUARD uses new ideas from neural network explainability and AI cognitive research. This effort shows the military's increasing interest in setting clear safety rules for its AI systems.
CES 2026 Shows Agentic AI Hype Meets Media Buyer Reality
The Consumer Electronics Show 2026 in Las Vegas heavily featured agentic AI. Agencies and tech platforms showcased their AI-powered autonomous media buying tools. However, media buyers see this technology as interesting but not yet urgent, according to Digiday executive editor Seb Joseph. Joseph explained that large language models would need training on the complex programmatic supply chain to replace human roles. Nvidia, an infrastructure player, also had a strong presence at CES, engaging with both ad tech and agency companies. The event highlighted a practical approach to AI rather than just new tech trends.
New AI Technologies Transform Industries Globally
A new report from BCC Research shows how emerging AI technologies are transforming many industries. These technologies include generative AI, edge AI, and quantum machine learning. They are bringing big changes to sectors like healthcare, finance, logistics, and media. Companies are gaining a competitive edge by using these more efficient and smarter solutions in their operations. The report focuses on practical results and how AI solves real-world problems. Startups are also using AI to innovate and disrupt traditional markets.
Tech Giants Boost US Defense with AI Amid Global Threats
Artificial intelligence is becoming a new battlefield as tech giants help strengthen US defense. This increase in defense power is happening because of growing global threats from China, Iran, and Latin America. Joe Lonsdale, who is a Managing Partner at 8VC and a Co-Founder of Palantir, discussed how AI is changing the US military's strength. He shared his insights on the show "Mornings with Maria."
Phison Tech Lowers AI Hardware Costs at CES 2026
Phison Electronics showed off its aiDAPTIV+ technology at CES 2026. This new technology uses high-capacity NAND flash to expand GPU memory, letting powerful AI tasks run on everyday PCs. It greatly reduces the amount of DRAM needed for large language models. For instance, a 120-billion-parameter setup can now run with 32 GB of DRAM instead of the usual 96 GB. Phison claims aiDAPTIV+ can make response times up to ten times faster and lower power usage. This innovation aims to make AI work more affordable and available to many users.
AlphaGainium Launches AI Trading Platform for Faster Returns
AlphaGainium, a quantitative trading firm, launched a new AI-driven platform on January 13, 2026. This platform aims to provide higher investment returns by combining financial expertise with artificial intelligence. It uses data-driven strategies and fast execution to take advantage of market opportunities in futures, forex, and spot markets. The system processes information in near real time, allowing trading strategies to adjust quickly to changing market conditions. Risk management tools are built into the system to monitor exposure and manage volatility. This platform shows how data and computation are becoming central to modern investment work.
Parents Attend AI Class at Peter White Library
The Peter White Public Library held an artificial intelligence class for parents. This event took place on January 12, 2026. The class aimed to help parents learn more about AI.
Expert Advises Investors to Join AI Trade
An expert advises investors to get involved in the artificial intelligence trade. This recommendation comes as data centers are growing very quickly. Panelists Stuart Kaiser and Luke Lloyd discussed this topic on "Varney & Co." They talked about the start of earnings season and how AI continues to drive the markets.
Sources
- The Earnings Season is Still All About AI and Big Tech. That Won’t Last.
- This earnings season is still all about AI. That won’t last.
- AI Stocks Are Set for Strong Earnings. Trump Just Introduced This Big Risk.
- Meta refocuses on AI hardware as metaverse layoffs begin
- Meta Begins Job Cuts as It Shifts From Metaverse to AI Devices
- Army moves to assess AI’s ‘unpredictable behaviors’ and safeguard autonomous systems
- CES 2026: Agentic AI hype vs. media buyers’ pragmatism
- Cloud AI Update - AI Innovations Transforming Industries Through Emerging Technologies
- AI becomes the new battlefield as tech giants power US defense surge
- Phison’s new tech slashes AI hardware costs
- AlphaGainium Unveils AI-Powered Quant Trading Platform Focused on Data, Speed, and Alpha
- AI class for parents held at Peter White Public Library
- Expert urges investors to have ‘exposure to the AI trade’ amid massive data center growth
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