Magnificent Seven earnings incoming

This week could be make-or-break for your portfolio—and it doesn’t even have to do with the presidential election.

Earnings season is picking up steam: Almost half of the S&P 500 is reporting over the next few days, including five members of the Magnificent 7.

All eyes are on tech this week, and for good reason. Over the past two years, AI-fueled tech companies have carried the market on their backs. But can big tech keep up its big momentum?

Here’s what analysts are projecting for all five of the Magnificent 7 stocks reporting this week:

• Alphabet: Investors will be hearing from Google’s new CFO, Anat Ashkenazi, for the first time in its earnings call tomorrow—and they’ll want to learn more about the search giant’s massive AI spending spree. Analysts forecast the company will report about $86.3 billion in revenue, up from $76.7 billion in the same quarter last year, and $1.84 earnings per share, up from $1.44, in its quarterly results tomorrow. The company’s shares are up 21% year to date.
• Microsoft: Back in July, Microsoft announced that it would increase its AI spending—now we’ll see by how much. When the company reports on Wednesday, analysts project revenue will come in at $64.65 billion, above the $56.52 billion a year ago, and EPS of $3.11, up from $2.99. Shares of the company are up 15% in 2024.
• Meta Platforms: The company formerly known as Facebook has seen gargantuan returns this year—even for an AI company—which means investor scrutiny will be more intense than ever when it reports results on Wednesday. Revenue is expected to come in at $40.25 billion, up from the $34.15 billion a year ago, and the company is expected to report EPS of $5.20, up from $4.39. Shares have soared 67% year to date.
• Amazon: The company is hoping to make a big comeback after its Q2 earnings miss. Analysts expect the online retailer’s revenue to come in at $157.2 billion, up from $143 billion a year ago, and earnings per share to hit $1.15, up from $0.94, when it reports on Thursday. Amazon’s stock has risen 26% year in 2024.
• Apple: Thursday marks the first quarterly results since the company released the iPhone 16. Analysts expect revenue to come in at about $94.58 billion, up from $89.5 billion last year, and earnings per share of $1.46, up from $1.40 a year prior. The stock has risen 25% year to date.

What to watch

Investors should keep a sharp eye out for cloud infrastructure growth, including figures from Microsoft’s Azure Business, Amazon Web Services, and Google Cloud.

Another key metric to watch is margins amid a larger consumer slowdown, especially in China.

The big picture: The biggest five companies in the S&P 500—Apple, Alphabet, Amazon, Nvidia and Microsoft—are expected to post average earnings growth of 19% for Q3. Sounds like a lot, right? But that would actually be their slowest collective growth in six quarters, according to Bloomberg Intelligence data.

That tells you just how high the bar has been raised for AI companies—and how even the slightest miss can send these stocks, and the entire market, tumbling. Proceed with caution.—LB