The latest earnings season is now well underway, with Magnificent 7 companies starting to release their latest results this week.
US president Donald Trump's unpredictable and fast-moving tariff agenda has prompted some big moves in US stocks, with fears that this could tip the economy into recession. The S&P 500 (^GSPC) is down more than 10% year-to-date, while the tech-focused Nasdaq (^IXIC) has slid nearly 16% in that time.
All of the Mag 7 companies — comprised of Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Meta (META), Alphabet (GOOG), GOOGL), Amazon (AMZN) and Tesla (TSLA) — are trading in the red year-to-date.
This group of tech behemoths had a rocky start to the year, as the release of a lower cost artificial intelligence (AI) model by Chinese start-up DeepSeek sparked concerns around the level on spending in this space by major US tech companies.
This created some nervousness going into the first earnings season of 2025, while high expectations around financial performance from the Mag 7 also appeared to lead to some disappointment when they reported in January and February.
Since then, Trump's tariff blitz has fuelled broader market volatility and heaped further pressure on these stocks, as investors weigh the impact of duties on their supply chains and business costs.
AJ Bell's (AJB.L) investment experts Russ Mould, Danni Hewson and Dan Coatsworth said on Thursday that the Mag 7 have lost nearly $4tn (£3tn) of stock market capitalisation between them since their aggregate valuation hit $18.4tn on 24 December, which represents a drop of one-fifth.
"That still means their combined worth is 5% above where it was a year ago, so it is too early to talk about a real loss of faith in them — even if gold is up by a third in the past 12 months, to hint at some kind of change in the market’s mood," they said.
"Any shift in sentiment toward this septet could have wide-ranging implications, though, given how they still represent almost one third of the total stock market valuation of the S&P 500 index."
With that in mind, here's what to expect from the Mag 7 this earnings season.
Tesla (TSLA) — Released results on Tuesday 22 April
Shares in Tesla (TSLA) were up nearly 7% in pre-market trading on Wednesday morning, after CEO Elon Musk said he was going to spend less time in Washington and more time at his electric vehicle company.
"Starting early next month, in May, my time allocation to DOGE [Department of Government Efficiency] will drop significantly," said Musk in a post-earnings conference call on Tuesday.
Tesla's first quarter earnings missed estimates, with revenue of $19.34bn (£14.51bn) compared to expectations of $21.43bn, according to Bloomberg consensus. Adjusted earnings per share of $0.27 also came in below estimates of $0.44.
The EV company said that plans for new affordable vehicles were on track to start production in the first half of 2025 and that it still expected Robotaxi production to begin in 2026.
Tesla CEO Elon Musk said he was going to spend less time in Washington and more time at his electric vehicle company. ·REUTERS / Reuters
Tesla shares have dropped 41% year-to-date, amid a backlash against Musk for his role heading up US president Donald Trump's DOGE, overseeing cuts to government agencies. Tesla sales have also fallen, with figures released earlier this month showing the company notched 336,681 deliveries in the first quarter, compared to expectations of 390,342.
Russ Mould, investment director at AJ Bell (AJB.L), said: "Investors have welcomed the news that Elon Musk will be cutting back his role as adviser to the White House on government efficiency.
"While Musk will still keep his foot in the door, the fact he intends to spend fewer hours with the Trump administration should mean more time to help fix Tesla’s problems. His to-do list is getting longer by the day and that was evident from a poor set of first-quarter results from Tesla and the challenges ahead linked to tariffs and potential supply chain disruption."
Alphabet (GOOGL, GOOG) — Releases first quarter results on Thursday 24 April
Shares in Google-parent Alphabet (GOOGL, GOOG) are down 19% year-to-date, with the stock having slumped following the release of a mixed set of fourth quarter results back in early February.
While earnings per share of $2.15 beat Bloomberg consensus estimates of $2.13, revenue of $96.47bn came in slightly below the $96.62bn expected by analysts. In addition, Alphabet said it planned to spend $75bn on AI this year, which was 29% higher than analysts expected, according to Reuters.
In a note on 8 April, JPMorgan (JPM) analysts said that they were "reducing estimates, multiples, & price targets on 25 companies across our internet coverage universe based on tariff impact, macro headwinds, and a potential recession."
They kept an "overweight" rating on Alphabet but lowered their price target to $180 from $220.
"As the largest global ad platform, Google is a reflection of the broader economy, and therefore we expect the company to be negatively impacted by tariff-related slowdown, macro uncertainty, and removal of the de minimis rule," they said.
Trump signed an executive order on 2 April to close the "de minimus" trade loophole, which allowed merchandise priced below $800 to enter the US duty-free.
JPMorgan analysts added that while Google's search business "should be more resilient than most other types of ad spend given typically high [return on investment], it will still be affected by a weaker consumer and lower [gross domestic product], and Google also has exposure to brand spend through YouTube and Network."
Shares in Google-parent Alphabet are down 19% year-to-date. ·REUTERS / Reuters
AJ Bell's Mould said that consensus estimates were looking for 12% year-on-year sales growth in the first quarter to $75.5bn and a 6% increase in earnings per share to $2.01 — "although the range is very wide, at $1.93 to $2.20".
In the event that Alphabet's management does offer any guidance for the second quarter, Mould said that analysts’ consensus calls for sales growth of 11% to $78.1bn and a 10% increase in earnings per share to $2.08, but added there was again a wide range on this metric.
"The first quarter should not have really been affected by tariffs, but there is a risk that Q2 and beyond will be," he said.
"Management may not have too much visibility beyond Q2 so it might be hard for them to say much, but the comparables are tougher in the second half against 2024’s base which featured both the Olympics and the US presidential election," Mould added. "Equally, Alphabet’s powerful market position may provide some shelter from any slowdown, as ad spending cuts are likely to fall more heavily elsewhere first."
Meta (META) — Releases first quarter earnings on Wednesday 30 April
Facebook-parent Meta (META) stood out from the rest of the Mag 7 in the first earnings season of the year, with investors cheering its fourth quarter results.
Mark Zuckerberg's social media company beat expectations with revenue of $48.4bn, compared to estimates of $46.9bn, while earnings per share of $8.02 were also ahead of the $6.75 forecast by analysts.
Shortly before the release of those results, Zuckerberg announced that Meta planned to spend between $60bn and $65bn on AI infrastructure projects this year, including the construction of a data centre that he said would be so large its footprint would cover a large chunk of Manhattan.
Meta said that it expected revenue to come in between $39.5bn and $41.8bn, which would represent growth of 8% to 15% from the prior year period. By comparison, the company's fourth quarter revenue was up 21% over the past year.
In a note on 7 April, Jefferies (JEF) analysts shared their expectations for Meta's results, estimating that revenue would come in at $40.2bn, which would be up 10% year-on-year. They expected earnings per share of $5.42, which would be up 15% year-on-year.
The analysts maintained a "buy" rating on the stock and had a price target of $600 on the shares.
They said that Meta's recently released Llama 4 suite of AI models "reasserts its leadership position".
"With DeepSeek and other model releases increasing the pressure, Meta rose to occasion and delivered an impactful Llama 4 release reasserting its leadership position," they said. "We view Meta with this Llama 4 release as yet again pushing the frontier of LLMs [large language models] forward and the open-source community."
Besides these latest advancements in AI, Jefferies' analysts said that part of their investment thesis on Meta was based on the fact that the company connects more than 3.5 billion people around the world to over 10 million advertisers, with "best-in-class data and targeting capabilities delivering high-quality and relevant advertising to a loyal user base."
In addition, they said that Meta "will continue to innovate on the advertising front, driving higher monetization across its various platforms."
The analysts also said that high return-on-investment ecommerce advertising products on Facebook and Instagram "increase ad spend across the platform."
"New AI products could drive improved performance for advertisers," they added.
Shares in Meta were up in pre-market trading on Wednesday, despite the European Union revealing that it was hitting the social media company with a €200m (£171m) fine for breaching the bloc's antitrust rules. The EU also fined iPhone-maker Apple €500m under the digital competition laws.
Microsoft (MSFT) — Releases third quarter earnings on Wednesday 30 April
Investors will be keen to find out any more details on Microsoft's (MSFT) AI data centre plans, after it recently revealed that it would "slowing or pausing" some projects.
Noelle Walsh, the president of Microsoft's cloud computing operations, said in a post on LinkedIn: "In recent years, demand for our cloud and AI services grew more than we could have ever anticipated and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history."
She said “any significant new endeavor at this size and scale requires agility and refinement as we learn and grow with our customers. What this means is that we are slowing or pausing some early-stage projects.”
Shares in Microsoft are down 13% year-to-date and have failed to so far recover after falling following the release of its second quarter results at the end of January.
Revenue for the quarter of $69.6bn came in just ahead of consensus estimates of $68.92bn, while earnings per share of $3.23 beat expectations of $3.11, according to a Reuters report.
"Microsoft is in one of the strongest positions to benefit from the AI revolution given that artificial intelligence can be integrated into the majority of Microsoft's existing products," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"Within Azure, it’s Cloud services division, demand for AI services has been a big growth area, attracting new clients as Microsoft competes against rivals like Amazon’s AWS."
"Because of this it’s set to stay sensitive to concerns about lower demand for AI technology amid the uncertainty," she added. "It has already reduced the scale of some data centre projects in the US and Europe, and any hint of a further reduction in demand could lead to further volatility in the share price."
Apple (AAPL) — Releases second quarter results on Thursday 1 May
Cupertino-based Apple is projected to report earnings of $1.60 per share on a diluted basis, reflecting a 4.6% increase from last year. While the profit figure is expected to show growth, the broader economic context, particularly tariff-related issues, could have significant implications for Apple’s performance moving forward.
On 9 April, the Trump administration announced a 90-day pause on all reciprocal tariffs, except those targeting China. However, Trump then said on Tuesday that he expects tariffs on China to come down "substantially" from the promised levy of up to 145%.
These tariffs are a key concern for Apple, as they could potentially push up the cost of its core products— iPhones, Macs, and AirPods — making them more expensive for consumers and potentially limiting demand.
Tariffs are a key concern for Apple, as they could potentially push up the cost of its core products. ·CFOTO via Getty Images
Apple's fortunes are closely tied to its performance in Greater China, an essential market for the company. However, according to data from Visible Alpha, total revenue estimates for Apple in fiscal year 2025 have dipped by nearly $5bn, from $412bn to $407bn. Much of this revision comes from a downward adjustment to the company’s revenue expectations in China, which have been reduced from $70bn to $66bn.
The company has seen its share price plunge 20% year-to-date.
“While the risk of further trade escalation remains, there is also a chance that things could end up better than feared and Apple could employ several mitigating strategies including (1) raising prices on products (in US and/or globally), (2) pressuring supply chains, (3) raising pricing on services (very low elasticity given stickiness), (4) appeal for exceptions, (5) Reoptimize supply chain (takes time) and (6) potentially move away from a cadence of annual product releases,” said Wamsi Mohan, research analyst at Bank of America Securities, in a note on 14 April.
Amazon (AMZN) — Releases first quarter earnings on Thursday 1 May
Amazon is set to release its quarterly earnings next week. While the company posted strong results last quarter, it may face more pressure this time, particularly from tariff-related challenges.
According to Danni Hewson, head of financial analysis at AJ Bell, said tariff concerns "help to explain the sharp pullback from what had been a new all-time high in February in the wake of the full-year results for 2024.
"They showed a record annual profit, to help reinforce the view that Amazon was one of the frontrunners in the race to lead and monetise the development of generative AI, thanks in particular to its cloud-service business AWS, which made far more money than the US and International retail arms.”
Raymond James analyst Josh Beck downgraded Amazon’s stock to an “outperform” rating from “strong buy” and slashed his price target to $195, down from $275. The tech giant’s stock has dropped 21% year-to-date, underscoring the market’s concerns about external factors like tariffs.
According to Beck, about 30% of Amazon’s gross merchandise value is “China-linked.” In addition, Chinese sellers represent approximately 15% of advertising purchases on Amazon’s platform.
"Amazon is facing revenue and margin headwinds from tariffs, particularly on Chinese imports. Key risks include higher 3P & 1P seller costs, logistics and retail cost inflation, and potential ad spend pullback from Chinese sellers. Goods' selling prices by both 3P and 1P will likely increase, and some of the increase could be absorbed by sellers. This could lead to lower sales and margins, and potentially very conservative Q2 guide," Jefferies said in a note.
Ahead of the earnings announcement, analysts expect Amazon to report a profit of $1.37 per share on a diluted basis, reflecting a 21.2% increase from $1.13 per share in the same quarter last year.
Nvidia (NVDA) — Releases first quarter results on Wednesday 28 May
Chipmaker Nvidia's results typically come much later in the earnings season, which only adds to anticipation in the build up to it reporting.
Volatility since the start of the year has brought its status as the market's AI darling under greater scrutiny, with shares down 26% year-to-date.
This started with DeepSeek's disruption of AI sector in January, prompted a sharp drop in Nvidia shares, wiping $589bn off its market value in a single day.
Nvidia's fourth quarter earnings, released in February, failed to match up to investor's lofty expectations. Revenue of $39.3bn beat estimates of £38.2bn and earnings per share of $0.89 were also ahead of forecasts of $0.84. In addition, the company said it expected to generate revenue of $43bn for the first quarter, better than the $42.3bn expected.
However, Nvidia (NVDA) guided to gross profit margins of 70.6% to 71% in the first quarter, which would be down on the 73% it reported in the fourth quarter.
The stock has declined further since those results, with concerns over how Trump's tariffs could impact the business. Last week, Nvidia said that the US government has required licences for exports to China of the company's H20 AI chip. The chip-maker said the move would result in a financial hit of $5.5bn.
However, Trump's comments on China tariffs on Tuesday signalled a row back offering some relief to trade tensions between the two countries.
Volatility since the start of the year has brought Nvidia's status as the market's AI darling under greater scrutiny, with shares down 26% year-to-date. ·picture alliance via Getty Images
Despite concerns about chip curbs, Hargreaves Lansdown's Streeter said that "when you look at the mega revenues Nvidia keeps pulling in, with 55% growth in sales forecast this year Nvidia still shines in the AI space. Of course, forecast are just forecasts and a miss could still cloud sentiment but a surprise on the upside could give the stock a significant boost."
"Concerns about a slowdown in demand for AI technology has also been affecting sentiment towards the company," she said. "Nvidia’s potential scale will depend, to a large extent, on demand for its products from other tech giants. Fresh worries emerged after Amazon indicated it was pausing some data centre leasing for its cloud division, which would weigh on demand for infrastructure including Nvidia’s products. However, Amazon has clarified that overall, there will be no fundamental changes to expansion plans."
"Longer-term, Nvidia looks set to continue to offer a compelling solution to a growing customer base, with its technological edge and capital light model set to provide bulk to its dominant position, despite the emergency of cheaper rivals in the market," Streeter added.
