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These megacap stocks were the top performers in 2023 and have continued to outperform the market except for Apple and Tesla, shares of which have declined 14.3% and 40.8%, respectively, on a year-to-date basis.
Meanwhile, MSFT, META, NVDA, AMZN and GOOGL have returned 6.2%, 35.9%, 53.9%, 15% and 10.3%, respectively, over the same timeframe.
Nevertheless, the magnificent 7 have continued to dominate the S&P 500 with a weightage of 29.7% as of Apr 17, per Datatrek research, as cited by Investors’ Business Daily. This is higher than the 27.9% weight in 2023.
AI Proliferation Aiding Magnificent 7
The magnificent 7 have been benefiting from the massive proliferation of AI. Demand for AI is escalating, and that has increased the need for data center capacity expansion. Leading cloud computing providers like Amazon, Alphabet, Microsoft and Meta platforms have multi-year investment plans to support greater cloud capacity.
The advent of generative AI has further attracted investments. Large Language Models that form the backbone of generative AI requires significant computational power to process massive amount of data. The growing proliferation of generative AI has boosted the demand for chips, particularly graphics processing units, benefiting semiconductor companies.
Let’s delve deep into find out what the magnificent 7 stocks are expected to report this earnings season.
Tesla is set to report first-quarter 2024 results on Apr 23. This Zacks Rank #5 (Strong Sell) stock delivered 386,810 cars (369,783 Model 3 and Y, and 17,027 Model S and X) worldwide in the first quarter, down 8.5% year over year and below the estimate of 457,000 as compiled by FactSet. This marked the first year-over-year drop in quarterly deliveries since 2020.
The decline was due to “the early phase of the production ramp-up” of its updated Model 3 at its Fremont factory and plant shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin, which led to a weeklong production halt in its Germany factory. Read More: Tesla’s Q1 Earnings Likely to Disappoint: Here’s Why
Meta Platforms is set to report its first-quarter 2024 results on Apr 24. Increased engagement for Meta’s offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
Effective usage of AI has been helping this Zacks Rank #2 (Buy) company keep its users engaged. AI-driven feed recommendations have been a key catalyst.
Meta has been leveraging gen AI to boost user experience across its apps. AI stickers, AI-based editing tools, advanced conversational assistant — Meta AI — and others to improve user engagement. Read More: Meta Platforms to Report Q1 Earnings: What to Expect
Alphabet, which currently has a Zacks Rank #3 (Hold), is set to report its first-quarter 2024 results on Apr 25. Its robust cloud division is aiding substantial revenue growth. Expanding data centers, cloud regions and availability zones is expected to have bolstered Alphabet’s presence in the cloud space in the to-be-reported quarter.
Moreover, a deepening focus on generative AI technology is a major positive for Alphabet. Google Bard and Search Generative Experience are powered with Gemini Pro to deliver enhanced user experience.
Microsoft has benefited most from the rapid deployment of generative AI thanks to its collaboration with OpenAI. The steady adoption of this Zacks Rank #3 company’s productivity and collaboration tools and services is expected to have aided top-line growth in third-quarter fiscal 2024. Read More: Assessing Your Microsoft Stake Ahead of Q3 Earnings
Strength in Intelligent Cloud and Productivity and Business Processes, driven by growth in Azure, Office 365 suite and other cloud services, is expected to have aided top-line growth in the to-be-reported quarter. Microsoft is set to report third-quarter fiscal 2024 results on Apr 25.
Amazon is set to report first-quarter 2024 earnings on Apr 30. The e-commerce giant is benefiting from solid Prime momentum owing to ultrafast delivery services and a strong content portfolio. Strengthening relationships with third-party sellers is a positive.
Expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Also, deepening focus on generative AI is a major plus for this Zacks Rank #3 company as it extends its partnership with NVIDIA for the Blackwell GPU platform.
Meanwhile, Apple is expected to report a sluggish second quarter of fiscal 2024 due to weak iPhone sales. Lackluster China sales due to stiff competition is expected to have hurt AAPL’s result, which is scheduled to be reported on May 2.
Apple expects the March quarter’s revenues and iPhone revenues to be similar to that of the year-ago quarter’s figure after removing the additional $5 billion it generated due to pent-up demand for iPhone 14 and iPhone 14 Pro Max in the year-ago quarter. Unfavorable forex is expected to hurt revenues by 2% on a year-over-year basis.
Lastly, NVIDIA is likely to report its first-quarter fiscal 2025 results on May 22. It has been benefiting from the strong growth of AI, high-performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units based on NVIDIA Hopper and Ampere architectures.
Collaborations with Mercedes-Benz and Audi are likely to advance this Zacks Rank 1 (Strong Buy) company’s presence in the autonomous vehicles and other automotive electronics space, thereby driving top-line growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
Image: Bigstock
What's in Store for Magnificent 7 Stocks in Q1 Earnings?
The magnificent 7 stocks — Tesla (TSLA - Free Report) , Meta Platforms (META - Free Report) , Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) , Amazon.com (AMZN - Free Report) , Apple (AAPL - Free Report) and NVIDIA (NVDA - Free Report) — are set to report their quarterly results in a few days.
These megacap stocks were the top performers in 2023 and have continued to outperform the market except for Apple and Tesla, shares of which have declined 14.3% and 40.8%, respectively, on a year-to-date basis.
Meanwhile, MSFT, META, NVDA, AMZN and GOOGL have returned 6.2%, 35.9%, 53.9%, 15% and 10.3%, respectively, over the same timeframe.
Nevertheless, the magnificent 7 have continued to dominate the S&P 500 with a weightage of 29.7% as of Apr 17, per Datatrek research, as cited by Investors’ Business Daily. This is higher than the 27.9% weight in 2023.
AI Proliferation Aiding Magnificent 7
The magnificent 7 have been benefiting from the massive proliferation of AI. Demand for AI is escalating, and that has increased the need for data center capacity expansion. Leading cloud computing providers like Amazon, Alphabet, Microsoft and Meta platforms have multi-year investment plans to support greater cloud capacity.
The advent of generative AI has further attracted investments. Large Language Models that form the backbone of generative AI requires significant computational power to process massive amount of data. The growing proliferation of generative AI has boosted the demand for chips, particularly graphics processing units, benefiting semiconductor companies.
Let’s delve deep into find out what the magnificent 7 stocks are expected to report this earnings season.
Tesla is set to report first-quarter 2024 results on Apr 23. This Zacks Rank #5 (Strong Sell) stock delivered 386,810 cars (369,783 Model 3 and Y, and 17,027 Model S and X) worldwide in the first quarter, down 8.5% year over year and below the estimate of 457,000 as compiled by FactSet. This marked the first year-over-year drop in quarterly deliveries since 2020.
The decline was due to “the early phase of the production ramp-up” of its updated Model 3 at its Fremont factory and plant shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin, which led to a weeklong production halt in its Germany factory. Read More: Tesla’s Q1 Earnings Likely to Disappoint: Here’s Why
Tesla, Inc. Price and EPS Surprise
Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote
Meta Platforms is set to report its first-quarter 2024 results on Apr 24. Increased engagement for Meta’s offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
Effective usage of AI has been helping this Zacks Rank #2 (Buy) company keep its users engaged. AI-driven feed recommendations have been a key catalyst.
Meta has been leveraging gen AI to boost user experience across its apps. AI stickers, AI-based editing tools, advanced conversational assistant — Meta AI — and others to improve user engagement. Read More: Meta Platforms to Report Q1 Earnings: What to Expect
Meta Platforms, Inc. Price and EPS Surprise
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
Alphabet, which currently has a Zacks Rank #3 (Hold), is set to report its first-quarter 2024 results on Apr 25. Its robust cloud division is aiding substantial revenue growth. Expanding data centers, cloud regions and availability zones is expected to have bolstered Alphabet’s presence in the cloud space in the to-be-reported quarter.
Moreover, a deepening focus on generative AI technology is a major positive for Alphabet. Google Bard and Search Generative Experience are powered with Gemini Pro to deliver enhanced user experience.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Microsoft has benefited most from the rapid deployment of generative AI thanks to its collaboration with OpenAI. The steady adoption of this Zacks Rank #3 company’s productivity and collaboration tools and services is expected to have aided top-line growth in third-quarter fiscal 2024. Read More: Assessing Your Microsoft Stake Ahead of Q3 Earnings
Strength in Intelligent Cloud and Productivity and Business Processes, driven by growth in Azure, Office 365 suite and other cloud services, is expected to have aided top-line growth in the to-be-reported quarter. Microsoft is set to report third-quarter fiscal 2024 results on Apr 25.
Microsoft Corporation Price and EPS Surprise
Microsoft Corporation price-eps-surprise | Microsoft Corporation Quote
Amazon is set to report first-quarter 2024 earnings on Apr 30. The e-commerce giant is benefiting from solid Prime momentum owing to ultrafast delivery services and a strong content portfolio. Strengthening relationships with third-party sellers is a positive.
Expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Also, deepening focus on generative AI is a major plus for this Zacks Rank #3 company as it extends its partnership with NVIDIA for the Blackwell GPU platform.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
Meanwhile, Apple is expected to report a sluggish second quarter of fiscal 2024 due to weak iPhone sales. Lackluster China sales due to stiff competition is expected to have hurt AAPL’s result, which is scheduled to be reported on May 2.
Apple expects the March quarter’s revenues and iPhone revenues to be similar to that of the year-ago quarter’s figure after removing the additional $5 billion it generated due to pent-up demand for iPhone 14 and iPhone 14 Pro Max in the year-ago quarter. Unfavorable forex is expected to hurt revenues by 2% on a year-over-year basis.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
Lastly, NVIDIA is likely to report its first-quarter fiscal 2025 results on May 22. It has been benefiting from the strong growth of AI, high-performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units based on NVIDIA Hopper and Ampere architectures.
Collaborations with Mercedes-Benz and Audi are likely to advance this Zacks Rank 1 (Strong Buy) company’s presence in the autonomous vehicles and other automotive electronics space, thereby driving top-line growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.