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Tesla Misses, GOOGL Beats: What's in Store for Rest of the Mag 7?
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Tesla (TSLA - Free Report) and Alphabet (GOOGL - Free Report) , two of the magnificent 7 stocks, recently reported their quarterly results. While TSLA’s second-quarter 2024 earnings of 52 cents per share missed the Zacks Consensus Estimate by 16.13%, GOOGL reported second-quarter earnings of $1.89 per share, beating the consensus mark by 2.16%.
Following the unimpressive second-quarter results, TSLA shares were down roughly 7% in pre-market trading. Alphabet shares are down 2% pre-market. However, GOOGL shares have returned 30.2% year to date.
Meanwhile, META, MSFT, AMZN, AAPL and NVDA have returned 38.1%, 18.3%, 22.7%, 16.9% and 148.6%, respectively, over the same timeframe.
YTD Performance
Image Source: Zacks Investment Research
AI Proliferation Aiding Magnificient 7
The magnificent 7 has been benefiting from the massive proliferation of AI. Demand for AI is escalating, and that has increased the need for data center capacity expansion. The advent of generative AI has further attracted investments.
Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. GenAI software spending is expected to surge from 8% in 2023 to 35% by 2027. Deloitte expects enterprise spending on GenAI to increase 30% in 2024 from $16 billion in 2023.
Let’s delve deep and find out what the rest of the magnificent 7 stocks are expected to report this earnings season.
Microsoft has benefited most from the rapid deployment of generative AI (GenAI) thanks to its collaboration with OpenAI. This Zacks Rank #3 (Hold) company is benefiting from its strategic focus on cloud services, particularly Azure and the Office 365 suite.
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 fourth-quarter fiscal 2024 results on Jul 30.
MSFT beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 7.38%.
Meta Platforms is set to report its second-quarter 2024 results on Jul 31. META is riding on strong advertising revenue growth prospects.
Meta Platforms’ offerings — WhatsApp, Instagram, Messenger and Facebook — currently reach more than three billion people daily. Its staggering reach and increasing ad impressions (up 20% year over year in first-quarter 2024) make META one of the most important players in the digital ad sales market apart from Google and Alphabet.
Meta Platforms’ advertising revenues are expected to benefit from strong spending by advertisers as they leverage META’s growing AI prowess. It has been leveraging AI and machine learning to boost the potency of its social-media offerings, including WhatsApp, Instagram, Facebook and Threads.
Effective usage of AI has been helping this Zacks Rank #3 company keep its users engaged. AI-driven feed recommendations have been a key catalyst.
META beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 13.3%.
Amazon is set to report second-quarter 2024 earnings on Aug 1. 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.
The strong adoption rate of AWS is aiding AMZN’s cloud dominance. Improving Alexa skills along with robust smart home product offerings are tailwinds. The robust advertising business is also contributing well. This Zacks Rank #1 (Strong Buy) company’s strong global presence and solid momentum among small and medium businesses remain a plus. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMZN beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 48.17%.
Meanwhile, Apple is expected to report a sluggish third quarter of fiscal 2024 due to weak iPhone sales. Lackluster China sales due to stiff competition are expected to have hurt AAPL’s results, which are scheduled to be reported on Aug 1.
Nevertheless, an expanding user base of more than 2 billion active devices makes Apple’s investment profile attractive. This Zacks Rank #2 (Buy) company’s Mac sales are expected to have jumped 20.8% year over year in the second quarter of 2024, per the latest data from market research firm IDC. The iPhone maker is estimated to have shipped 5.7 million Macs, thereby grabbing a market share of 8.8% compared with 7.5% in the year-ago quarter.
Moreover, AAPL shares have been gaining attention from investors thanks to its AI push with the introduction of Apple Intelligence, an advanced personal intelligence system seamlessly integrated into iOS 18, iPadOS 18 and macOS Sequoia, at WWDC.
AAPL beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 4.14%.
Lastly, NVIDIA is likely to report its second-quarter fiscal 2025 results on Aug 28. 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.
NVIDIA’s GPUs are rapidly benefiting from the proliferation of AI. By applying its GPUs in AI models, the Zacks Rank #3 is expanding its base in other untapped markets like automotive, healthcare and manufacturing, which will support its earnings and revenues. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in the autonomous vehicles and other automotive electronics space, thereby driving top-line growth.
NVDA beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 18.43%.
Image: Bigstock
Tesla Misses, GOOGL Beats: What's in Store for Rest of the Mag 7?
Tesla (TSLA - Free Report) and Alphabet (GOOGL - Free Report) , two of the magnificent 7 stocks, recently reported their quarterly results. While TSLA’s second-quarter 2024 earnings of 52 cents per share missed the Zacks Consensus Estimate by 16.13%, GOOGL reported second-quarter earnings of $1.89 per share, beating the consensus mark by 2.16%.
The rest of the magnificent 7 stocks — Meta Platforms (META - 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.
Following the unimpressive second-quarter results, TSLA shares were down roughly 7% in pre-market trading. Alphabet shares are down 2% pre-market. However, GOOGL shares have returned 30.2% year to date.
Meanwhile, META, MSFT, AMZN, AAPL and NVDA have returned 38.1%, 18.3%, 22.7%, 16.9% and 148.6%, respectively, over the same timeframe.
YTD Performance
Image Source: Zacks Investment Research
AI Proliferation Aiding Magnificient 7
The magnificent 7 has been benefiting from the massive proliferation of AI. Demand for AI is escalating, and that has increased the need for data center capacity expansion. The advent of generative AI has further attracted investments.
Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. GenAI software spending is expected to surge from 8% in 2023 to 35% by 2027. Deloitte expects enterprise spending on GenAI to increase 30% in 2024 from $16 billion in 2023.
Let’s delve deep and find out what the rest of the magnificent 7 stocks are expected to report this earnings season.
Microsoft has benefited most from the rapid deployment of generative AI (GenAI) thanks to its collaboration with OpenAI. This Zacks Rank #3 (Hold) company is benefiting from its strategic focus on cloud services, particularly Azure and the Office 365 suite.
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 fourth-quarter fiscal 2024 results on Jul 30.
MSFT beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 7.38%.
Microsoft Corporation Price and EPS Surprise
Microsoft Corporation price-eps-surprise | Microsoft Corporation Quote
Meta Platforms is set to report its second-quarter 2024 results on Jul 31. META is riding on strong advertising revenue growth prospects.
Meta Platforms’ offerings — WhatsApp, Instagram, Messenger and Facebook — currently reach more than three billion people daily. Its staggering reach and increasing ad impressions (up 20% year over year in first-quarter 2024) make META one of the most important players in the digital ad sales market apart from Google and Alphabet.
Meta Platforms’ advertising revenues are expected to benefit from strong spending by advertisers as they leverage META’s growing AI prowess. It has been leveraging AI and machine learning to boost the potency of its social-media offerings, including WhatsApp, Instagram, Facebook and Threads.
Effective usage of AI has been helping this Zacks Rank #3 company keep its users engaged. AI-driven feed recommendations have been a key catalyst.
META beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 13.3%.
Meta Platforms, Inc. Price and EPS Surprise
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
Amazon is set to report second-quarter 2024 earnings on Aug 1. 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.
The strong adoption rate of AWS is aiding AMZN’s cloud dominance. Improving Alexa skills along with robust smart home product offerings are tailwinds. The robust advertising business is also contributing well. This Zacks Rank #1 (Strong Buy) company’s strong global presence and solid momentum among small and medium businesses remain a plus. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMZN beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 48.17%.
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 third quarter of fiscal 2024 due to weak iPhone sales. Lackluster China sales due to stiff competition are expected to have hurt AAPL’s results, which are scheduled to be reported on Aug 1.
Nevertheless, an expanding user base of more than 2 billion active devices makes Apple’s investment profile attractive. This Zacks Rank #2 (Buy) company’s Mac sales are expected to have jumped 20.8% year over year in the second quarter of 2024, per the latest data from market research firm IDC. The iPhone maker is estimated to have shipped 5.7 million Macs, thereby grabbing a market share of 8.8% compared with 7.5% in the year-ago quarter.
Moreover, AAPL shares have been gaining attention from investors thanks to its AI push with the introduction of Apple Intelligence, an advanced personal intelligence system seamlessly integrated into iOS 18, iPadOS 18 and macOS Sequoia, at WWDC.
AAPL beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 4.14%.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
Lastly, NVIDIA is likely to report its second-quarter fiscal 2025 results on Aug 28. 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.
NVIDIA’s GPUs are rapidly benefiting from the proliferation of AI. By applying its GPUs in AI models, the Zacks Rank #3 is expanding its base in other untapped markets like automotive, healthcare and manufacturing, which will support its earnings and revenues. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in the autonomous vehicles and other automotive electronics space, thereby driving top-line growth.
NVDA beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 18.43%.
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.