Magazine 7 ETFs to Watch This Earnings Season

The fourth-quarter earnings season is underway, and the so-called “Magnificent 7″ firms are in focus. The “Magazine 7,” the inventory market darlings, have roared larger on the AI craze.

The seven shares are Apple AAPL, Microsoft MSFT, Alphabet (GOOG, GOOGL), Amazon AMZN, NVIDIA NVDA, Tesla TSLA and Meta Platforms META. Among the many seven, Tesla, Microsoft and Meta Platform would be the first to report, with their releases scheduled after market shut on Jan. 29. Apple is scheduled to report on Jan. 30, adopted by Alphabet on Feb. 4 and Amazon on Feb. 6. NVIDIA is prone to report later subsequent month.

The fourth-quarter earnings of the “Magazine 7” firms are anticipated to be up 20.9% from the identical interval final yr on 12.2% larger revenues. This could observe the 32.9% earnings progress on 15.4% larger revenues within the third quarter. Per Bloomberg Intelligence, income for the “Magazine 7” are projected to extend by 22% within the fourth quarter from a yr earlier, the smallest bounce for the reason that first quarter of 2023 (learn: Can “Magnificent Seven” ETFs Retain Their Glory in 2025?).

Keep up-to-date with all quarterly releases:See Zacks Earnings Calendar.

Tesla

Tesla has an Earnings ESP of +1.68% and a Zacks Rank #3 (Maintain). In keeping with our methodology, the mixture of a constructive Earnings ESP and a Zacks Rank #1 (Robust Purchase), 2 (Purchase) or 3 will increase the probabilities of an earnings beat. You’ll be able to uncover one of the best shares to purchase or promote earlier than they’re reported with our Earnings ESP Filter.

The electrical carmaker noticed a unfavourable earnings estimate revision of a few cents over the previous seven days for the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter earnings signifies substantial year-over-year progress of 4.2% and income progress of 9.3%. The earnings monitor file of the corporate is average because it delivered a four-quarter common earnings shock of 0.13%. The electrical carmaker has gained about 55% within the final three months, outperforming the business’s common progress of 24%.

Tesla has made a stable comeback, particularly after Trump’s election victory, and reclaimed its trillion-dollar market cap. The EV maker is anticipated to learn from Trump’s administration for quite a lot of causes. Tesla has the size and scope that’s unmatched within the EV business and this dynamic might give the EV maker a transparent aggressive benefit in a non-EV subsidy setting. Moreover, the potential for larger China tariffs would possible hold cheaper Chinese language EV producers like BYD and Nio (NIO) from flooding the U.S. market within the coming years. Trump’s administration can even assist expedite regulatory approval of the corporate’s autonomous driving expertise.

Nevertheless, Tesla inventory took successful as the corporate missed estimates for fourth-quarter deliveries and recorded its first year-over-year decline in full-year automobile deliveries within the firm’s historical past. Trump, final week, rolled again pro-EV insurance policies, which additionally weighed on shares. Tesla shares fell 12% in a month (learn: Tesla Slips on Q4 Delivery Miss: ETFs in Focus).

Microsoft

Microsoft has an Earnings ESP of -2.43% and a Zacks Rank #4 (Promote). Microsoft noticed a unfavourable earnings estimate revision of a penny over the previous 30 days for the second quarter of fiscal 2025. Its earnings monitor file is spectacular, with the fourth-quarter earnings shock being 4.91%, on common. The Zacks Consensus Estimate signifies earnings progress of 6.8% and income progress of 10.8% from the year-ago quarter. Microsoft has gained about 4% over the previous three months, underperforming the business’s common progress of 11.8%.

The world’s largest software program firm is without doubt one of the largest beneficiaries of the AI growth. It has been investing billions of {dollars} in increasing its world community of knowledge facilities and different bodily infrastructure required to develop AI expertise that may compose paperwork, make pictures and function a lifelike private assistant at work or house. Although Azure progress will proceed to decelerate, Microsoft expects its AI enterprise to be on monitor to herald greater than $10 billion in gross sales someday within the subsequent quarter.

Microsoft expects revenues of $68.1-$69.1 billion for the fiscal second quarter of 2025, implying 10.6% progress on the mid-point.

Meta Platforms

Meta Platforms has an Earnings ESP of +6.74% and Zacks Rank #3. The social media large noticed a stable earnings estimate revision of 15 cents for the fourth quarter over the previous seven days. Analysts rising estimates proper earlier than earnings — with probably the most up-to-date info attainable — is an efficient indicator for the inventory. The Zacks Consensus Estimate for the yet-to-be-reported quarter signifies substantial year-over-year earnings progress of 29.5%. Revenues are anticipated to extend 17.1% yr over yr. Meta Platforms delivered an earnings shock of 11.34%, on common, within the final 4 quarters. Shares of META have gained about 12% over the previous three months, barely forward of the business’s common progress of 11.7%.

Meta obtained a value goal enhance from a few analysts forward of its earnings launch. Wedbush raised the value goal for the inventory from 680 to 700 and BofA International Securities lifted the value goal to 710 from 660.

The world’s largest social media platform expects to put up revenues within the vary of $45-$48 billion for the fourth quarter. Nevertheless, Meta expects a “vital acceleration” in infrastructure spending this yr because it continues to pour cash into creating AI. Chief government Mark Zuckerberg pledged to spend considerably on infrastructure and different tasks just like the metaverse and AI-powered glasses. Meta plans to speculate round $60 to $65 billion in AI in 2025, up from the $40 billion spent in 2024. Administration additionally plans to launch its personal GPUs by the tip of the yr.

Apple

Apple has an Earnings ESP of -1.51% and a Zacks Rank #4. Apple noticed no earnings estimate revision over the previous 30 days for the fiscal first quarter of 2025. The iPhone maker has a powerful monitor file of constructive earnings surprises. It delivered a median earnings shock of 5.05% within the trailing 4 quarters. The Zacks Consensus Estimate signifies a modest year-over-year enhance of 8.3% for earnings and three.7% for revenues. The inventory has underperformed the business, having shed 4.6% over the previous three months.

The iPhone producer rolled out the primary wave of Apple Intelligence functions on Oct. 28 and the second wave on Dec. 11. Since each AI functions are just for English-language customers, these options haven’t boosted gross sales of iPhone 16 handsets. As such, Jefferies downgraded Apple to underperform, which was uncommon. Apple expects so as to add AI options in different languages beginning in April.

On the lastearnings name Apple supplied weak gross sales steering for the fiscal first quarter. It expects “low to mid-single digit” gross sales progress.

Alphabet

Alphabet has an Earnings ESP of +5.96% and Zacks Rank #3. It noticed no earnings estimate revision over the previous 30 days for the fourth quarter. The corporate’s earnings shock monitor file over the previous 4 quarters is sweet, with the common being 11.84%. Earnings are anticipated to extend 29.3%, whereas revenues are anticipated to develop 12.5% from the year-ago quarter. The Web behemoth has risen 20% within the final three months, outperforming the business’s common progress of 11.7%.

Google is going through headwinds from antitrust lawsuits and intensifying competitors within the AI house. Analysts are involved concerning the influence of generative AI on Google’s core search enterprise.

Amazon

Amazon has an Earnings ESP of +8.62% and a Zacks Rank #2. The inventory noticed a constructive earnings estimate revision of 4 cents over the previous 30 days for the fourth quarter. The Zacks Consensus Estimate signifies a year-over-year earnings enhance of 52.48% and substantial income progress of 10.1% for the to-be-reported quarter. Moreover, Amazon’s earnings shock historical past is spectacular, with the four-quarter common shock being 25.85%. The inventory has risen 20% previously three months, larger than the business’s progress of 11.7%.

Amazon soared to new all-time highs final week, given its continued dominance in e-commerce and increasing footprint in cloud computing, promoting, and varied different sectors. Amazon’s AI enterprise, already up by triple-digit percentages, is rising a lot quicker than the cloud enterprise at a comparable stage of evolution. The world’s largest on-line retailer expects revenues within the vary of $181.5-$188.5 billion for the fourth quarter of 2024.

Like different tech firms, Amazon has been ramping up investments in information facilities, chips and the ability wanted for AI workloads.

ETFs to Faucet

Given this, traders might wish to put money into these shares by way of ETFs. Under, now we have highlighted some ETFs with the biggest publicity to Magazine 7.

Roundhill Magnificent Seven ETF (MAGS): It’s the first-ever ETF providing traders equal-weight publicity to the Magnificent 7 shares.

MicroSectors FANG+ ETN (FNGS): This ETN is linked to the efficiency of the NYSE FANG+ Index, which is equal-dollar weighted and designed to supply publicity to a gaggle of extremely traded progress shares of next-generation expertise and tech-enabled firms. The be aware accounts for a ten% share in every of the seven shares. MicroSectors FANG+ ETN has a Zacks ETF Rank #3 (see: all the Technology ETFs here).

Vanguard Mega Cap Progress ETF (MGK): It tracks the CRSP US Mega Cap Progress Index. It holds 69 securities in its basket, with the Magazine 7 collectively accounting for 58.2% of the overall property. MGK has a Zacks ETF Rank #2.

Invesco S&P 500 Prime 50 ETF (XLG): Invesco S&P 500 Prime 50 ETF measures the cap-weighted efficiency of the biggest firms on the S&P 500 Index, reflecting the efficiency of U.S. mega-cap shares. It holds 53 shares in its basket, with the Magazine 7 accounting for a mixed 54.9% share. XLG has a Zacks ETF Rank #2.

iShares S&P 100 ETF (OEF): iShares S&P 100 ETF gives publicity to the 101 largest U.S. firms. Magazine 7 shares account for a mixed 47% share. OEF has a Zacks ETF Rank #2.