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Nasdaq’s “Magnificent 7” including Tesla (NASDAQ:), Microsoft (NASDAQ:), Alphabet (NASDAQ:), Meta Platforms (NASDAQ:), Amazon (NASDAQ:), Apple (NASDAQ:), and Nvidia (NASDAQ:) . :), have started their third quarter earnings season. Even though Tesla’s disappointing results caused the stock to drop 10%, the remaining six tech giants are showing promise despite macroeconomic concerns such as rising bond yields, inflation fears and the impact in the price of oil from the war between Israel and Hamas.
Today, investors’ attention is focused on mega-cap technology companies during this earnings season. Tesla’s start last week has laid the groundwork for the big five: Apple, Microsoft, Alphabet (Google’s parent company), Amazon and Nvidia. These companies make up about a quarter of the market capitalization and could significantly influence the broader market with their results.
Strong performance and substantial year-over-year increases are expected to offset any profit declines in other sectors. Without these tech giants, the average earnings of S&P 500 companies would fall by 5%. Meta Platforms will report this week, followed by Apple and Nvidia in November.
Key areas of focus include Google Search and YouTube growth, Meta’s user base expansion and new offerings, Microsoft’s Personal Computing sector performance, and Amazon’s cloud computing leadership. Investment in ai, R&D and IT spending will be fundamental to the results calls.
Factors like Netflix’s (NASDAQ:) blockbuster earnings report indicating sustained consumer spending on streaming services are favoring Amazon (Prime Video), Alphabet (YouTube), and Apple (popular shows). The upcoming holiday season is expected to boost Amazon’s third-quarter earnings, which are expected to double from last year.
The rise of ai could improve the relevance of Meta ads on Instagram and Reels platforms and Nvidia’s third-quarter growth, contributing to S&P 500 earnings growth. Apple could benefit from iPhone 15 sales, while Microsoft could benefit from sales of the Xbox console. Stakeholders in Rivian (NASDAQ (Amazon) and Waymo (Alphabet) could also see gains.
The Wall Street Breakfast Survey is evaluating investors’ top holdings among the ‘Magnificent 7’ stocks. For broader exposure to Big tech, investors could consider MicroSectors FANG+ ETN and Invesco S&P 500 Top 50 ETF.
This article was generated with the support of ai and reviewed by an editor. For more information consult our T&C.
