The third-quarter earnings season is underway, and all eyes are on the so-called “Magnificent 7” tech giants. These companies, once the darlings of the stock market, have seen their momentum falter in recent months. The fading AI craze and investors’ shift towards sectors benefiting from rate cuts have contributed to their decline.
The Magnificent 7, comprising Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG, GOOGL), Amazon (AMZN), NVIDIA (NVDA), Tesla (TSLA), and Meta Platforms (META), are expected to deliver strong third-quarter results despite the recent market headwinds.
Tesla:
Leading the charge, Tesla will be the first to report its third-quarter earnings after market close today. Investors are keenly anticipating details on the company’s plans for a sub-$30,000 electric vehicle (EV) and its long-term Cybercab vision, following the recent Robotaxi event that left investors wanting more concrete details regarding its ridesharing platform.While Tesla’s earnings are expected to decline year-over-year, its revenue is projected to rise, reflecting the company’s continued growth in EV deliveries.
Alphabet:
The internet behemoth is set to report its earnings on October 29. Alphabet’s earnings surprise track record has been impressive, with analysts expecting a significant year-over-year increase. However, the company is facing headwinds from antitrust lawsuits and fierce competition in the AI space, raising concerns about the impact of generative AI on Google’s core search business.
Microsoft:
Microsoft will report its earnings on October 30. The software giant is expected to deliver solid earnings growth driven by continued demand for cloud computing and its investments in AI services. While Azure growth may slow in the current quarter, Microsoft’s substantial investments in data centers and servers position the company for accelerated growth in the future.
Meta Platforms:
Also reporting on October 30, Meta Platforms is poised for substantial year-over-year earnings growth. The social media giant’s strong user engagement, effective monetization of video content, including Reels, and increased ad load are key drivers of its projected growth.
Apple:
Apple is set to report its earnings on October 31. The iPhone maker is expected to deliver modest year-over-year growth, fueled by the launch of its AI-powered iPhone 16 series. The new iPhones are anticipated to drive the next big upgrade cycle, restoring investor confidence in Apple’s performance.Amazon:
Amazon, the e-commerce giant, will report its earnings on October 31. The company is expected to deliver significant revenue growth, driven by its robust e-commerce business, booming advertising unit, and accelerating cloud computing growth, fueled by its AI capabilities.Navigating the Earnings Season:
Investors looking to capitalize on the Magnificent 7’s potential can explore ETFs like the Roundhill Magnificent Seven ETF (MAGS), which offers equal-weight exposure to these tech giants. Other ETFs like the MicroSectors FANG+ ETN (FNGS), Vanguard Mega Cap Growth ETF (MGK), Invesco S&P 500 Top 50 ETF (XLG), and iShares S&P 100 ETF (OEF) provide diversified exposure to these companies.The earnings season will be crucial for these tech giants, as they navigate challenges and opportunities in the evolving market landscape.
Investors will be closely watching to see how these companies are leveraging AI, cloud computing, and user engagement to drive future growth and regain market momentum.
Stay tuned for the upcoming earnings reports and insightful analysis to guide your investment decisions.
