As expected, the Magnificent 7 companies have captured investors' attention this US earnings season.
After delivering blockbuster returns in both 2023 and 2024, investors have become accustomed to strong returns from the Magnificent 7. However, their performance for the year to date (as a group) has been dismal.
Between Deepseek, tariffs, and an overall US market pullback, there's been plenty of headwinds for the US technology sector to grapple with.
With the 7 largest US technology companies making up several popular US-focused ASX ETFs, including the Betashares Nasdaq 100 ETF (ASX: NDQ), ASX investors have been eagerly monitoring their earnings reports as they have come in over the past couple of weeks.
With all but Nvidia (NASDAQ: NVDA) having now reported, let's review the highlights.
Tesla Inc (NASDAQ: TSLA)
Electronic vehicle maker Tesla was the first to report, delivering its result last week. Coming into the result, Tesla shares had suffered, falling as much as 50% from the 2024 peak. Unfortunately, the earnings report wasn't ideal, with net profit cratering 71%. Automotive revenue also dropped 20% to $14 billion from $17.4 billion in the same period last year. However, Tesla enthusiasts continue to have high hopes for its autonomous driving and robotics initiatives. The company advised it is making good progress in these areas.
This week, The Motley Fool's Sebastian also reported that Tesla had begun the search for a successor to CEO Elon Musk. Soon after the Wall Street Journal broke the story, Tesla Chair Robyn Denholm was quick to deny the report. However, with Musk's tenure at Tesla being "one of the most consequential in American history", this was certainly big news. Any further developments will be closely monitored.
Alphabet (NASDAQ: GOOG)
Next up, Alphabet (the parent of Google) delivered a pleasing earnings report. The company delivered 12% revenue growth to $90.23 billion. This was driven by strong growth in Alphabet's search and advertising units. The result was better than expected, sending the shares 4% higher that day. However, Alphabet's shares are still down 15% for the year to date (at the time of writing).
Microsoft (NASDAQ: MSFT)
Earlier this week, Microsoft delivered its earnings report. The Motley Fool's Tristan reported that the company achieved 13% revenue growth to $70.1 billion. This was driven by an 11% increase in cloud services revenue, a 10% lift in Microsoft consumer products and cloud services revenue, a 7% increase in Linkedin revenue, a 21% increase in intelligent cloud (including Azure) revenue, and an 8% increase in Xbox content and services revenue. From a share price perspective, Microsoft has held up the best of the Magnificent 7 this year, as the only one in positive territory (at the time of writing).
Meta Platforms Inc (NASDAQ: META)
Meta was the next Magnificent 7 stock to report, also delivering a strong result. The social media giant reported 16% revenue growth to $42.3 billion, beating analyst estimates. Daily active users on Meta's platforms also increased 6% in March to an average of 3.4 billion.
Investors appeared pleased to learn that Meta has no plans to reduce its capital expenditure. Rather, management increased its full-year capital spending estimate to between $64 billion and $72 billion (previously between $60 billion and $65 billion). CEO Mark Zuckerberg also calmed investors' nerves on the potential impact of tariffs on advertising spending, suggesting the company was well placed to navigate the macroeconomic outlook. Meta shares are down 4.5% for the year to date (at the time of writing). This is in line with the S&P 500 Index (SP: .INX).
Apple (NASDAQ: AAPL)
Thursday night, Apple delivered its much anticipated earnings report. Since President Trump's tariff announcement, the iPhone maker has been one of the most talked about stocks on Wall Street. Apple's quarterly report revealed 5% revenue growth and 8% earnings per share growth, beating analyst estimates. Overall iPhone sales were slightly higher, while services revenue posted solid 12% year-over-year gains. The company also announced a new $100 billion buyback program and boosted its quarterly dividend by 4% to $0.26 per share.
While Apple shares have clawed back a good portion of ground lost since Liberation Day, they are not out of the woods yet. Tariff exemptions for smartphones and electronics have given some relief. However, the company is reportedly advancing plans to shift some of its manufacturing to India to negate (some) tariff impact.
No doubt, investors will be keen to hear Warren Buffett's take on Apple this weekend at Berkshire Hathaway's Annual General Meeting. While Apple remains Berkshire's largest position, Buffett has been aggressively selling down the iPhone maker since last year.
Amazon (NASDAQ: AMZN)
Amazon also delivered its earnings report on Thursday night. The company has been in the news this week, after it was reported that the e-commerce giant had planned to display import charges on future invoices. The company was quick to deny the report.
Amazon reported 9% quarterly revenue growth to $155.7 billion. This was driven by 17% growth in its Amazon Web Services (AWS) division, 19% growth in advertising revenue, and 6% growth in online sales revenue. Third-party-seller services revenue slowed significantly, to a 7% growth rate, compared to a 16% growth rate a year ago.
Amazon shares are down 14% for the year to date (at the time of writing). As one of the most directly impacted businesses by tariffs (along with Apple), Amazon is likely to continue to attract investor attention in the coming period.
Nvidia (NASDAQ: NVDA)
Last but not least, Nvidia is due to report later this month. Known for inspiring investor watch parties in recent quarters, Nvidia's next earnings report will no doubt attract plenty of investor interest. Stay tuned.
