Alphabet Inc. (GOOGL, GOOG), the parent company of Google, has delivered a stellar performance in the third quarter, exceeding analysts’ expectations and boosting the combined market capitalization of the ‘Magnificent Seven’ tech giants to an unprecedented $16.8 trillion. The company’s strong performance is driven by its thriving advertising business, highlighting its continued dominance in the digital advertising landscape.
Alphabet’s earnings per share came in at $2.12, reflecting a remarkable 37% increase compared to the same period last year. This figure significantly surpassed the consensus estimate of $1.55, according to data from Benzinga Pro. Revenue for the quarter reached $88.27 billion, marking a 15% year-over-year rise and exceeding analysts’ projections of $86.39 billion. Google’s advertising revenue played a pivotal role in driving this growth, reaching $65.9 billion, a substantial increase from $59.6 billion last year.
The impressive performance has sparked a significant rally in Alphabet’s stock price, surging over 6% by mid-morning on Wednesday. This rally marks Alphabet’s best trading session since April. The stock price increase translated into a more than $150 billion surge in Alphabet’s market capitalization, which now stands at $2.239 trillion. This surge also gave a significant boost to the combined valuation of the Magnificent Seven, pushing it to a record-high $16.8 trillion.
While Alphabet soared on the back of its strong quarterly report, other stocks within the Magnificent Seven showed mixed performance on Wednesday. Nvidia Corp. (NVDA) experienced a decline as investors grew cautious on semiconductor stocks following weaker-than-expected earnings from Advanced Micro Devices Inc. (AMD).
The week remains pivotal for the Magnificent Seven, as several other tech giants are set to release their quarterly earnings. Microsoft Corp. (MSFT) and Meta Platforms Inc. (META) will report their results after the close on Wednesday, while Amazon.com Inc. (AMZN) and Apple Inc. (AAPL) will follow suit on Thursday after the market close.
Looking at the group’s recent performance, Tesla Inc. (TSLA) emerged as the strongest over the last five days, with its stock gaining 20.28% following a positive reaction to its recent earnings report.
Here’s a breakdown of market caps, recent price changes and year-to-date returns for each company within the Magnificent Seven:
| Name | Market Cap | Price Chg (5 Days) | Total Return (YTD) |
|—|—|—|—|
| Apple Inc. | $3,526.02B | -1.67% | 20.91% |
| NVIDIA Corporation | $3,416.76B | -3.00% | 181.33% |
| Microsoft Corporation | $3,255.49B | 2.43% | 17.08% |
| Alphabet Inc. | $2,237.83B | 9.48% | 29.92% |
| Amazon.com, Inc. | $2,035.74B | 2.25% | 27.66% |
| Meta Platforms, Inc. | $1,507.24B | 2.37% | 68.83% |
| Tesla, Inc. | $841.61B | 20.28% | 5.51% |
Alphabet’s post-earnings rally has boosted several exchange-traded funds with significant exposure to the stock.
| ETF Name | Weight % | 1-day %chg |
|—|—|—|
| Direxion Daily GOOGL Bull 2X Shares (GGLL) | 18.49% | +10.7% |
| iShares Global Communication Services ETF (IXP) | 12.61% | +1.8% |
| Fidelity MSCI Communication Services Index ETF (FCOM) | 12.40% | +1.8% |
| Vanguard Communication Services ETF (VOX) | 11.87% | +1.9% |
| Direxion Daily Magnificent 7 Bull 2X Shares (QQQU) | 10.73% | +2.5% |
| The Communication Services Select Sector SPDR Fund (XLC) | 10.70% | +1.5% |
| Kurv Technology Titans Select ETF (KQQQ) | 8.96% | +1.1% |
| NYLI U.S. Large Cap Core ETF (LRND) | 8.53% | +0.6% |
| Invesco AI and Next Gen Software ETF (IGPT) | 8.12% | -0.8% |
| ProShares Ultra Communication Services (LTL) | 7.99% | +3.5% |
Alphabet’s strong performance underscores the continued growth and dominance of the tech sector, particularly in the digital advertising landscape. With several other major tech companies set to report their earnings in the coming days, the market is likely to see significant volatility as investors assess the broader health of the sector.
