Big Tech's strong performance versus the S&P 500 (^GSPC) is often attributed to the success of the "Magnificent Seven" stocks. But it's really about three names this time around.

Nvidia (NVDA), Meta (META), and Amazon (AMZN) have significantly outperformed the S&P 500 to start 2024. Nvidia has led the trio, surging nearly 60% compared to the benchmark index's 6% increase.

The three names have also topped the performance of their peers in the Magnificent Seven. Microsoft (MSFT) has gained about 8% this year. Meanwhile, Apple (AAPL), Alphabet (GOOGL, GOOG), and Tesla (TSLA) have lost value through about two months of trade in 2024.

The stock moves are largely earnings based. In the current earnings season, Nvidia once again blew out expectations. Meta announced plans for a $50 billion share repurchase program and the company's first-ever dividend. Meanwhile, Amazon surprised to the upside with its revenue metrics.

Over the last 30 days as Wall Street analysts digested the latest round of corporate results from all seven Big Tech players, Meta, Amazon, and Nvidia saw the largest increases in earnings projections for both the current year and next year, according to research from DataTrek co-founder Jessica Rabe.

Meanwhile, Tesla and Microsoft were the only two of the group to see their earnings estimates move lower by more than the S&P 500 for next year.

The quarterly results of these companies are likely to shape the direction of the market at large. On Tuesday, Barclays head of US equity strategy Venu Krishna wrote that Big Tech earnings per share estimates for 2024 have "improved considerably" and moved the floor up for total S&P 500 earnings projections this year.

Consequently, the firm moved up its year-end target for the S&P 500 to 5,300 from 4,800 in part because of Big Tech earnings expectations. Goldman Sachs recently struck a similar tone in its call for the S&P 500 to end this year at 5,200.

"US Big Tech’s superior earnings estimate momentum versus the S&P 500 as a whole goes a long way in explaining why most of them have been able to continue to build on their [more than one] year run of outperformance," Rabe wrote in a note to clients on Monday night. "As much as rates have risen this year, most Big Tech names are in considerably better fundamental shape than the broader US equity market.

"As long as they keep delivering on earnings results in the same manner as last quarter, most of these stocks should keep outperforming and driving the S&P higher."