As the earnings season progresses, investors are particularly focused on the quarterly results of the Magnificent Seven, a group of leading tech companies comprising Apple, Microsoft, Alphabet, Nvidia, Tesla, Meta Platforms, and Amazon. These companies have significantly fueled the two-year bull market rally. For instance, the Roundhill Magnificent Seven ETF, which aims to mirror their performance, has increased by approximately 42% this year compared to 22% for the S&P 500. Nonetheless, recently these stocks have faced pressures as Wall Street re-evaluates their potential for future growth. The CNBC Magnificent 7 Index, which reached its peak over three months ago in early July, experienced a sharp decline during the early August selloff and has decreased by 1.3% in October, while the broader market has risen by over 1%.
Analysts have various expectations for each company as they prepare to report their earnings:
Microsoft is scheduled to report on October 30. It has an earnings per share (EPS) beat rate of 81% and has shown a positive reaction in 58% of cases on earnings day, according to Bespoke. Despite Microsoft shares declining nearly 4% in the third quarter, the majority of analysts, according to FactSet, maintain a positive view of the company, foreseeing an 18% upside to the average price target. The company expects future earnings boosts, especially following Nvidia’s Blackwell release, which Microsoft will use for its Azure cloud business, constituting a quarter of the company’s revenue. Analysts predict improvements in Azure’s performance and stability in Microsoft 365 Commercial Cloud growth.
Apple, reporting on October 31, has an EPS beat rate of 89%, with positive earnings day reactions 58% of the time. The company experienced a strong third quarter, with a stock increase of over 10% and ongoing momentum into October, reaching a new record. While analysts foresee a 4.6% upside, concerns exist regarding weak demand in the Chinese smartphone market. However, recent government stimulus in China might bolster demand. Apple’s wearables and services sectors are expected to provide positive momentum, although tariffs and economic growth challenges present risks, along with an ongoing antitrust case with the Justice Department.
Nvidia, set to report on November 14, boasts an EPS beat rate of 85%. Despite a nearly 2% decrease in the third quarter, its stock has increased by almost 167% in 2024. Analysts remain optimistic about Nvidia, predicting a 7.1% stock rise over the next year. The focus is now on AI demand outlook for 2026, although U.S. export limits amid trade tensions with China could pose risks.
Tesla will announce earnings on October 23. Despite a 32.2% stock rise in the third quarter, shares have decreased by nearly 16% this quarter following disappointing reactions to its robotaxi debut. Analysts are cautious, with a hold rating and a price target suggesting a 1.6% decline. Wells Fargo expects Tesla to miss third-quarter estimates, given lower-than-anticipated deliveries and aggressive financing promotions driving sales volumes.
Alphabet, with a reporting date of October 22, has seen a 70% EPS beat rate. Despite being up 23% this year, the third quarter saw shares drop by 8.8%, influenced by an antitrust ruling from the Justice Department. Analysts remain positive, anticipating that AI will strengthen Google’s search business. However, the company might face structural changes due to the ruling, potentially hindering its AI rollout.
Amazon reports on October 24 with a 64% EPS beat rate. Down 3.6% in the last quarter, Amazon faces pressure from reduced core retail business sales and disappointing third-quarter guidance. Analysts still hold a consensus buy rating, predicting an 18% potential upside. Amazon Web Services (AWS) is expected to continue driving growth, although capital expenditure requirements pose challenges.
Meta Platforms, whose results are due on October 30, has enjoyed an impressive year with its stock rising by 64% year-to-date, reflecting investor enthusiasm for its online advertising business and AI advancements. While the majority of analysts hold a buy rating, risks include operating losses from its Reality Labs division and potential slowdowns in Asia-Pacific revenue growth. However, analysts recognize Meta’s leadership in AR/VR and generative AI, with Meta executing well across its core business segments.
Overall, while these tech giants face specific challenges, analysts maintain a largely positive perspective on their future growth prospects.