Mag 7 Earnings: Tesla, Microsoft & Meta in Focus

The fourth-quarter earnings season is underway, and the so-called “Magnificent 7" companies are in focus. The “Mag 7,” the stock market darlings, have soared on the AI craze. The seven stocks are Apple AAPL, Microsoft MSFT, Alphabet GOOGL, Amazon AMZN, NVIDIA NVDA, Tesla TSLA and Meta Platforms META. Among the seven, Tesla, Microsoft and Meta Platform will be the first to report, with their releases scheduled after market close today. Apple is scheduled to report on Jan. 30, followed by Alphabet on Feb. 4 and Amazon on Feb. 6. NVIDIA is likely to report later next month.Image Source: Zacks Investment ResearchFourth-quarter earnings of the Mag 7 companies are expected to be up 20.9% from the same period last year on 12.2% higher revenues. This would follow the 32.9% earnings growth on 15.4% higher revenues in the third quarter. Per Bloomberg Intelligence, profits of the Mag 7 are projected to increase by 22% in the fourth quarter from a year earlier, the smallest jump since the first quarter of 2023.See the Zacks Earnings Calendar to stay ahead of market-making news.TeslaTesla has an Earnings ESP of +1.68% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.The electric carmaker saw a negative earnings estimate revision of a penny over the past seven days for the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter earnings indicates substantial year-over-year growth of 4.2% and revenue growth of 9.3%. The earnings track record of the company is moderate as it delivered a four-quarter average earnings surprise of 0.13%. The electric carmaker has gained about 55% in the past three months.Tesla, Inc. Price, Consensus and EPS Surprise Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. QuoteTesla has made a solid comeback, especially after Trump's election victory, and reclaimed its trillion-dollar market cap. The EV maker is expected to benefit from Musk's proximity to Trump's administration during its second term. Trump's administration could help expedite regulatory approval for new versions of Tesla's self-driving software and for its autonomous "robotaxis" to hit the road.However, Tesla stock took a hit when the company missed estimates for fourth-quarter deliveries and recorded its first year-over-year decline in full-year vehicle deliveries in the company's history. Trump recently rolled back pro-EV policies, which also weighed on TSLA shares. Tesla shares fell 5% in a month. MicrosoftMicrosoft has an Earnings ESP of -2.13% and a Zacks Rank #3. This software maker has witnessed a negative earnings estimate revision of a penny over the past seven days for the second quarter of fiscal 2025. Microsoft’s earnings surprise history is good, as it delivered an earnings surprise of 4.91%, on average, in the last four quarters. The company is expected to post substantial earnings growth of 6.5% and revenue growth of 10.8% in the to-be-reported quarter. Microsoft has gained about 3.5% over the past three months.Microsoft Corporation Price, Consensus and EPS Surprise Microsoft Corporation price-consensus-eps-surprise-chart | Microsoft Corporation QuoteThe world's largest software company is one of the biggest beneficiaries of the AI boom, courtesy of its partnership with ChatGPT creator OpenAI and its investments in data centers and Copilot AI applications. It has been investing billions of dollars in expanding its global network of data centers and other physical infrastructure required to develop AI technology that can compose documents, make images and serve as a lifelike personal assistant at work or home.In the latest development, Microsoft plans to spend $80 billion in fiscal 2025 on constructing data centers designed for artificial intelligence workloads. Over half of this spending will be focused on the United States, according to a blog post by Brad Smith, Microsoft vice chair and president.Though Azure growth will continue to slow down, Microsoft expects its AI business to be on track to bring in more than $10 billion in sales sometime in the coming quarters. Microsoft expects revenues of $68.1-$69.1 billion for the fiscal second quarter of 2025, implying 10.6% growth at the mid-point.Meta PlatformsMeta Platforms has an Earnings ESP of +6.74% and Zacks Rank #3. The social media giant saw a solid earnings estimate revision of 15 cents for the fourth quarter over the past seven days. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate for the yet-to-be-reported quarter indicates substantial year-over-year earnings growth of 29.5%. Revenues are expected to increase 17.1% year over year. Meta Platforms delivered an earnings surprise of 11.34%, on average, in the last four quarters. Shares of META have gained about 14% over the past three months. Meta Platforms, Inc. Price, Consensus and EPS Surprise Meta Platforms, Inc. price-consensus-eps-surprise-chart | Meta Platforms, Inc. QuoteMeta received a price target boost from a couple of analysts ahead of its earnings release. Wedbush raised the price target for the stock from $680 to $700 and BofA Global Securities lifted the price target to $710 from $660.The world’s largest social media platform expects to post revenues in the range of $45-$48 billion for the fourth quarter. However, Meta expects a “significant acceleration” in infrastructure spending this year as it continues to pour money into developing AI. Chief executive Mark Zuckerberg pledged to spend significantly on infrastructure and other projects like the metaverse and AI-powered glasses. Meta plans to invest around $60 to $65 billion in AI in 2025, up from $40 billion spent in 2024. Management also plans to launch its own GPUs by the end of the year. AppleApple has an Earnings ESP of -1.51% and a Zacks Rank #4 (Sell). Apple saw no earnings estimate revision over the past 30 days for the fiscal first quarter of 2025. The iPhone maker has a strong track record of positive earnings surprises. It delivered an average earnings surprise of 5.05% in the trailing four quarters. The Zacks Consensus Estimate indicates a modest year-over-year increase of 8.3% for earnings and 3.7% for revenues. The stock has gained about 4% over the past three months.Apple Inc. Price, Consensus and EPS Surprise Apple Inc. price-consensus-eps-surprise-chart | Apple Inc. QuoteThe iPhone manufacturer rolled out the first wave of Apple Intelligence applications on Oct. 28 and the second wave on Dec. 11. Since both AI applications are only for English-language users, these features haven’t boosted sales of iPhone 16 handsets.  As such, Jefferies downgraded Apple to underperform, which was rare. Apple expects to add AI features in other languages starting in April.On the last earnings call, Apple offered weak sales guidance for the fiscal first quarter. It expects “low to mid-single digit” sales growth. Alphabet Alphabet has an Earnings ESP of +5.96% and Zacks Rank #3. It saw no earnings estimate revision over the past 30 days for the fourth quarter. The company’s earnings surprise track record over the past four quarters is good, with the average being 11.84%. Earnings are expected to increase 29.3%, while revenues are expected to grow 12.5% from the year-ago quarter. The Internet behemoth has gained 12% in the last three months.Alphabet Inc. Price, Consensus and EPS Surprise Alphabet Inc. price-consensus-eps-surprise-chart | Alphabet Inc. QuoteGoogle is facing headwinds from antitrust lawsuits and intensifying competition in the AI space. Analysts are concerned about the impact of generative AI on Google's core search business.AmazonAmazon has an Earnings ESP of +8.62% and a Zacks Rank #2. The stock saw a positive earnings estimate revision of 4 cents over the past 30 days for the fourth quarter. The Zacks Consensus Estimate indicates a year-over-year earnings increase of 52.5% and substantial revenue growth of 10.1% in the to-be-reported quarter. Additionally, Amazon’s earnings surprise history is impressive, with the four-quarter average surprise being 25.85%. The stock has risen 23.6% in the past three months.Amazon.com, Inc. Price, Consensus and EPS Surprise Amazon.com, Inc. price-consensus-eps-surprise-chart | Amazon.com, Inc. QuoteAmazon recently soared to new all-time highs, given its continued dominance in e-commerce and expanding footprint in cloud computing, advertising, and various other sectors. Amazon’s AI business, already up by triple-digit percentages, is growing much faster than the cloud business at a comparable stage of evolution. The world's largest online retailer expects revenues in the range of $181.5-$188.5 billion for the fourth quarter of 2024. Like other tech companies, Amazon has been ramping up investments in data centers, chips and the power needed for AI workloads.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks