Tech Giants Gear Up for Earnings: What to Expect This Week

This week marks a crucial time in earnings season, as over a third of S&P 500 companies are set to report their results. Among those are five of the “Magnificent 7” stocks, a group that has captured significant investor attention.

Despite taking a pause in the third quarter after a strong first half, big tech stocks are once again at the forefront of the market. The Nasdaq Composite reached a new all-time high on Friday, its first since July.

According to Zacks Earnings Trends, the Magnificent 7 is anticipated to see an impressive +16.9% rise in Q3 earnings compared to last year, alongside a +13.3% increase in revenues. However, performance varies across the group; NVIDIA (NVDA) and Meta (META) are leading, while Tesla (TSLA) is trailing significantly.

During the first half of 2023, giants like Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Meta boosted their capital spending to $106.2 billion, a 49% jump from the same timeframe last year, as reported by the Wall Street Journal. As the race for artificial intelligence heats up, it is likely they will continue to spend heavily. Investors are keen to see if this investment will lead to earnings growth that matches their spending.

NVIDIA is set to announce its earnings next month, but the results from big tech this week may lift its shares, especially since a sizable share of their capital spending is focused on AI chips.

For those looking to invest, the Invesco NASDAQ 100 ETF (QQQM) offers an affordable way to gain exposure to major tech players. Alternatively, the Roundhill Magnificent Seven ETF (MAGS) provides equal-weighted exposure to the “Magnificent 7.”

Traders interested in short-term strategies might consider single-stock ETFs like the GraniteShares 2x Long NVDA Daily ETF (NVDL). These tools can be useful for high-conviction traders, particularly as volatility may increase this week. However, it’s crucial to remember that these products are not suitable for long-term investments.

For more insights, check out the short video above.

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Stock Analysis Reports:

• Alphabet Inc. (GOOG): Free Stock Analysis Report
• Amazon.com, Inc. (AMZN): Free Stock Analysis Report
• Microsoft Corporation (MSFT): Free Stock Analysis Report
• NVIDIA Corporation (NVDA): Free Stock Analysis Report
• Tesla, Inc. (TSLA): Free Stock Analysis Report
• Invesco QQQ (QQQ): ETF Research Reports
• Invesco NASDAQ 100 ETF (QQQM): ETF Research Reports
• Meta Platforms, Inc. (META): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.