The Magnificent Seven stocks — S&P 500 giants Amazon.com (AMZN), Apple (AAPL), Google parent Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) — have been grouped together since the start of the bull market in January 2023.
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The group has been less and less appropriate. Tesla earnings have tumbled for the past several quarters, while Tesla stock has tumbled. Apple earnings rose just 1% in the latest quarter, with sales declining.
Ultimately, share prices come down to earnings and earnings expectations. Companies that can deliver strong earnings growth over time will tend to outperform.
In fact, just three Magnificent Seven stocks can boast at least 25% earnings per share growth in the latest quarter, 25% expected EPS growth for the current fiscal year and 25% for the following year: Nvidia, Google and Amazon.
Meta Platforms comes close, with 78% EPS growth in Q1 and 36% seen for the full year. But per-share profit growth is expected to cool to nearly 15% in 2025.
Google earnings jumped 53% in the first quarter, with sales growth accelerating for a fourth straight quarter, to 15%. Full-year EPS should pop 30%, but 2025 profit gains are seen slowing to 14%.
Microsoft delivered 20% EPS growth in its latest quarter and is seen posting 20% growth for the June-ended fiscal 2024.
Meanwhile, another megacap stock, Eli Lilly (LLY), does meet this triple-25% earnings criteria.
Nvidia Earnings
The AI chip leader reports Wednesday night. Analysts expect Nvidia earnings to skyrocket 413% to $5.59 a share with sales up 242% to $24.57 billion.
In the prior quarter, Nvidia earnings exploded 486%.
For the full fiscal year, Wall Street forecasts 93% EPS growth, followed by 26% in the next.
NVDA stock rose 2.9% to 924.79 last week. Shares cleared a 922.20 cup-with-handle buy point on Wednesday, pulling back to test that entry on Friday.
Nvidia climbed 2.5% on Monday to 947.80.
Amazon Earnings
Amazon earnings soared 216% in the first quarter, with 57% growth expected for 2024. For 2025, the e-commerce and cloud-computing giant is seen reporting a 28% gain.
Amazon stock has been consolidating for several weeks, arguably forming a messy flat base. Shares are finding support at the 21-day moving average, just above the 10-week line. AMZN stock has forged a three-weeks tight pattern with a 191.70 official buy point that also could work for the broader consolidation.
Amazon dipped 0.6% to 183.54, just below the 21-day.
Eli Lilly Earnings
Eli Lilly earnings jumped 59% in the first quarter, as sales of weight-loss drug Zepbound ramp up dramatically. Per-share profit should surge 116% in 2024, followed by a 40% gain in 2025.
Eli Lilly rival Novo Nordisk (NVO) almost meets the triple-25% earnings criteria. The Danish drug giant's Q1 EPS rose 28%, with full-year profit seen rising just over 25%. But 2025 EPS is set to climb 23%.
Eli Lilly stock rose 1.3% to 770 last week, the fourth straight weekly gain. Investors could use 793.67 or 795.50 as buy points.
LLY stock climbed 1.75% to 783.48.
The S&P 500 giant has a market capitalization of $744.6 billion. That's higher than Tesla stock at $558 billion, but below the other Magnificent Seven stocks, which are all above $1 trillion.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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