The Magnificent Seven stocks — S&P 500 giants Amazon.com, Apple, Google parent Alphabet, Meta Platforms, Microsoft, Nvidia and Tesla — have been grouped together since the start of the bull market in January 2023.
The group has been less and less appropriate. Tesla earnings have tumbled for the past several quarters, while Tesla stock has sold off. 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 two 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 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, does meet this triple-25% earnings criteria.
Nvidia Earnings
The AI chip leader reported a massive 461% EPS gain for the fiscal first quarter in late May, with sales up 262% to $26.04 billion, both easily beating views.
It was the fourth straight quarter of triple-digit earnings and revenue growth.
For the full fiscal year, Wall Street forecasts 108% EPS growth, followed by 32% in fiscal 2026.
NVDA stock has skyrocketed since the May 22 earnings report.
Shares fell 1.2% to 1,209.98 on Thursday, reversing from a fresh record high but holding its newly won $3 trillion valuation. The $3.025 market cap has passed up Apple stock, which closed Thursday at $2.982 trillion. Microsoft stock is still No. 1, moving to $3.154 trillion on Thursday.
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 rose 2.05% to 185 on Thursday, reclaiming the 50-day line and breaking a short downtrend. That offered an early entry in an emerging base.
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 almost meets the triple-25% earnings criteria. The Danish drug giant's Q1 EPS rose 28%, with full-year profit seen rising nearly 26%. But 2025 EPS is set to climb 23%.
Eli Lilly stock rose 0.7% to 837.29 on Thursday, just past the edge of a buy zone.
The S&P 500 giant has a market capitalization of $795.8 billion. That's higher than Tesla stock at $567.5 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.
