Magnificent Seven latest: earnings season gets underway this week

Big tech stocks, in particular the ‘Magnificent Seven’, have dominated the stock market for more than two years.

The group of seven have been among the most-bought stocks for most of that period.

At the start of 2023, the seven tech companies comprised approximately a fifth of the S&P 500. Two and a half years later, that has risen to around a third, as an artificial intelligence (AI) spending boom has propelled these big tech stocks.

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That dominance of the stock market means that even beginner investors will have a lot of exposure to these companies through stock market trackers. Those who don’t invest actively will still have a lot of money riding on the Magnificent Seven stocks through their pension.

But various events have threatened to shake their dominance so far this year.

The emergence of DeepSeek, a Chinese AI platform that could outperform many Western models with seemingly lower compute costs, prompted double-digit declines in many Magnificent Seven share prices. Then, Donald Trump’s tariff war has put headwinds in place for these globally-connected businesses.

That has seen a divergence in performance for the seven companies that make up the Magnificent Seven. Nvidia has soared to unprecedented heights, but Tesla is in danger of lagging behind its rivals.

But will the numbers match the headlines? Magnificent Seven earnings season gets underway on 23 July, with both Google parent company Alphabet and Tesla releasing their earnings.

“Earnings season has gotten off to a strong start, with over 80% of early reports surpassing profit expectations,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown. One of these was Netflix, formerly of the FAANG grouping that preceded the Magnificent Seven. Netflix’s results highlight the level of expectation on the sector at present: despite beating analysts’ expectations, Netflix shares fell after its results were announced.

Going into another high-stakes big tech earnings season, what is the current outlook for the Magnificent Seven?

What are the Magnificent Seven stocks?

The Magnificent Seven – often abbreviated to ‘Mag7’ – comprises seven big tech stocks that the investing community perceives as being the leading exponents of technology in general and artificial intelligence (AI) in particular.

They are:

• Alphabet (NASDAQ:GOOGL) – the parent company of Google, as well as other companies such as the AI developers DeepMind and Anthropic;
• Amazon (NASDAQ:AMZN) – originally an online bookstore, now a giant of e-commerce and, via Amazon Web Services (AWS), cloud computing;
• Apple (NASDAQ:AAPL) – the tech hardware company that brought the world the MacBook and the iPhone;
• Meta (NASDAQ:META) – formerly Facebook, the company is now heavily focused on ‘Metaverse’ technology as well as AI products, like Llama model;
• Microsoft (NASDAQ:MSFT) – the computing giant behind the Windows operating system and the Azure cloud platform;
• Nvidia (NASDAQ:NVDA) – the hardware developer that pioneered GPUs, the chips that power AI data centres;
• Tesla (NASDAQ:TSLA) – the electric vehicle (EV) manufacturer that, according to CEO Elon Musk, is aiming to crack autonomous driving.

The term ‘Magnificent Seven’ was coined by Bank of America analyst Michael Hartnett in 2023. By then, the group was already starting to dominate the stock market in the wake of the AI and tech stock mania that followed the public launch of ChatGPT in late November 2022.

While each company is distinct, there are some general similarities that apply to most, if not all, of the group.

All are (or at least have been) incredibly innovative; Apple’s products have revolutionised personal computing, Meta made social media mainstream, and Tesla has demonstrated the viability of EVs.

Most are also highly diversified. Even if a specific product made a company like Meta or Amazon famous, these megacap companies now have their fingers in all sorts of technological pies – favourites being cloud computing and, of course, AI.

All the companies in the group are involved in AI, albeit in different ways and to varying degrees (Apple, for example, has drawn criticism for failing to develop its own AI products as fast as its counterparts).

Their key similarity, though, is their stock market dominance. At the time of writing, they comprise seven of the world’s nine largest companies by market capitalisation. All have a market cap of over $1 trillion – and some, such as Nvidia, are several times higher than this.

Latest Magnificent Seven news

Most of the Magnificent Seven companies are navigating a much more complex political world. As the potential disruption from tariffs as well as Musk’s clash with Trump highlight, these big tech giants must tread carefully, all while trying to stay ahead of one another in the development of the leading AI technology of the future.

Alphabet

Google’s parent company Alphabet gets Magnificent Seven earnings underway, along with Tesla, on Wednesday 23 July.

AI is a double-edged sword for Alphabet. Its own large language model (LLM) Gemini is popular, attracting around 400 million monthly visitors, according to DemandSage. Its self-driving car division Waymo is also one of the front-runners with operations in five US cities. Furthermore, the increased demand for compute power to train AI models is a boon for Google Cloud, the company’s cloud computing arm.

But as AI models become more proficient, they pose an existential threat to Google’s core business, its eponymous search engine. ChatGPT’s search function comprised more than 2% of global search volume in May 2025, according to data from Opollo – a small figure in its own right, but up 740% year-on-year, indicating a growth trajectory that could have some Google executives sweating.

Amazon

Amazon is demonstrating how legacy big tech businesses can harness generative AI (genAI) to their advantage. This year’s Prime Day event saw a 3,300% increase in genAI traffic to US retail sites, according to data from Adobe Analytics.

Amazon announces its latest earnings on 31 July after US markets close.

Apple

Apple’s share price has fallen 15.7% in the year to date, making it one of the worst-performing Magnificent Seven stocks so far this year.

For one thing, tariffs on US imports will be hugely disruptive to Apple’s supply chain. Trump previously berated CEO Tim Cook for plans to shift displaced Chinese manufacturing to India instead, putting a blocker on plans for the company to manufacture 25% of its iPhones in the country.

It is also struggling to harness AI in any form meaningful enough to grab the market’s attention. “Apple is at a highway rest stop on a bench, watching the fourth industrial revolution race go by at 100 miles an hour,” Dan Ives, global head of technology research at Wedbush Securities, said earlier in July.

Ives’ comments came in response to reports that Apple was looking at buying AI startup Perplexity, which according to Ives would be a “‘no-brainer’ deal to help launch Apple’s AI strategy. But it won’t be straightforward to complete: Perplexity was recently valued at $18 billion and could cost Apple even more than this to acquire.

“If Apple has to pay ~$30 billion, it's a drop in the bucket relative to the monetization opportunity Apple can achieve on AI,” said Ives.

Apple announces its results on 31 July.

Meta

Meta’s leadership has settled a case this weekend that saw shareholders suing the business for costing them billions of dollars in Federal Trade Commission (FTC) fines for breaching their data privacy back in the 2012 Cambridge Analytica scandal.

Despite this, Meta shares are flying, up 17.5% this year having enjoyed their longest winning streak ever back in February.

Meta announces earnings on 30 July and backers will hope for more good news on adoption of its Llama AI LLM that Zuckerberg touted at last quarter’s release.

Microsoft

Microsoft is benefitting from the AI boom through various channels. It is a major investor in OpenAI, the company behind ChatGPT, and it is also one of the major cloud providers alongside Google and Amazon, so is benefitting from increased AI training spend.

Its Copilot AI platform is also at the forefront of enterprise AI adoption, giving it a significant advantage.

“Many Microsoft customers are now focused on deploying enterprise use cases across a number of verticals with financials, government and retail clear standards,” said Ives.

Microsoft announces its earnings on 30 July.

Nvidia

Nvidia doesn’t release its earnings until 27 August.

The semiconductor giant became the first company in the world to break the $4 trillion valuation threshold earlier in July.

The stock was boosted in recent days when the US government overturned export controls of its H20 chips for the Chinese market. But The Information reported over the weekend that Nvidia has told Chinese customers it will limit supplies of the chip, which has been specifically designed to circumvent US export controls on cutting-edge AI technology to China.

Tesla

Tesla should be jubilant heading into its earnings release on 23 July, kicking off Magnificent Seven earnings season alongside Alphabet. After all, this month has seen the long-awaited launch of its robotaxi service in Austin, Texas.

But it looks set to be a second consecutive disappointing earnings release for Tesla. Vehicle deliveries for Q2 were released on 2 July and showed a 13% decline from the same period last year to 384,122, shy of the 389,000 analysts had forecast.

Last quarter, Tesla blamed the deliveries miss on an unprecedented overhaul of its Model Y production lines. It won’t have that excuse to fall back on this quarter: instead, it seems inescapably true that Elon Musk’s political activities have alienated Tesla’s key consumer base.

Is now the time to buy the Magnificent Seven?

The valuations of the Magnificent Seven go up and down, but many investors feel they are overvalued. Are the Magnificent Seven a good buy?

The answer of course depends on your personal circumstances, investment goals, and risk appetite, but before investing in big tech stocks it is worth remembering that their oversaturation in the stock market and strained valuations mean that they are relatively risky investments, despite the fact that they are big, established and highly profitable businesses.

The table below shows the price of these stocks relative to their earnings over the last 12 months (trailing) and analysts’ projections for the next 12 (forward).

^{Sources: *Wall Street analyst estimates via stockanalysis.com as of 18 July 2025, ^Birinyi Associates analysis via Wall Street Journal as of 18 July 2025.}

A degree of lustre has, on the whole, returned to the Magnificent Seven stocks following earnings season. All except Alphabet are trading above the average forward P/E of the S&P 500, while investors are also optimistic about Tesla, Microsoft and Amazon in relation to the index.

Value-focused investors may look favourably at Apple, Meta and Alphabet’s current valuations, being in-line with or below the average of the NASDAQ 100.