Yahoo Finance Earnings Preview of "Magnificent Seven": ETFs in Focus
The "Magnificent Seven" typically refers to the 1960 Western film, but today’s stock market investors recognize the term as the set of seven big tech stocks, namely Apple AAPL, Microsoft MSFT, Alphabet GOOGL, Amazon AMZN, Nvidia NVDA, Meta Platforms META and Tesla TSLA.
With the third-quarter earnings season underway, investors’ eyes will be glued to the "Magnificent Seven" earnings. While Tesla has already posted a weak Q3 earnings (missing estimates on both fronts), others are yet to report (read: Tesla Posts Weak Q3 Earnings: ETFs in Focus).
Investors should note that according to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings Whispers
Microsoft is expected to report on Oct 24. The stock has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). In the past 90 days, Microsoft’s earnings for the September quarter rose by 8 cents to $2.65 per share.
Alphabet is expected to report on Oct 24. The stock has an Earnings ESP of +0.89% and a Zacks Rank #3. In the past 90 days, Alphabet’s earnings for the September quarter rose by 11 cents to $1.45 per share.
Meta is expected to report on Oct 25. The stock has an Earnings ESP of +3.98% and a Zacks Rank #3. In the past 90 days, Meta’s earnings for the September quarter surged from $2.99 to $3.57 per share.
Amazon is expected to report on Oct 26. The stock has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). In the past 90 days, Amazon’s earnings for the September quarter surged from 39 cents to 58 cents per share.
Apple is expected to report on Nov 2. The stock has an Earnings ESP of 0.00% and a Zacks Rank #3. In the past 90 days, Apple’s earnings for the September quarter inched up by 2 cents $1.39 per share.
Nvidia is expected to report on Nov 15. The stock has an Earnings ESP of +6.93% and a Zacks Rank #1 (Strong Buy). In the past 90 days, Nvidia’s earnings for the October quarter jumped from $2.22 to $3.34 per share.
Inside the Valuation of Magnificent Seven
While the 'Magnificent Seven' hold industry-leading positions in areas such as Artificial Intelligence, cloud services, social networking, search engines, the metaverse, premium smartphones, and electric vehicles (which have enabled them to capture a huge global market share), valuation remains equally important in influencing their stock performance in the near future.
In this respect, Meta, Alphabet and Microsoft have a lower P/E than the concerned industry Computer Software-Services Market’s P/E, Apple’s P/E is almost in-line with the concerned industry Computer-Office Equipment Market’s P/E. However, Amazon, Tesla and Nvidia are pricey.
ETFs in Focus
Since some of the stocks appear overvalued and some stocks have witnessed earnings estimate upgrade by a smaller margin, investors may turn to the ETF approach as the basket form lowers the company-specific risks.
Apple-Heavy ETFs: Technology Select Sector SPDR Fund XLK, Fidelity MSCI Information Technology Index ETF FTEC
Microsoft-Heavy ETFs: XLK, FTEC
Alphabet-Heavy ETFs: Fidelity MSCI Communication Services Index ETF FCOM, Communication Services Select Sector SPDR Fund XLC
Meta-Heavy ETFs: XLC, FCOM
Nvidia-Heavy ETFs: VanEck Semiconductor ETF SMH, AXS Esoterica NextG Economy ETF WUGI
Tesla-Heavy ETFs: Meet Kevin Pricing Power ETF PP, Consumer Discretionary Select Sector SPDR Fund XLY
Amazon-Heavy ETFs: ProShares Online Retail ETF ONLN, XLY
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : 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
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
VanEck Semiconductor ETF (SMH): ETF Research Reports
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports
Fidelity MSCI Communication Services Index ETF (FCOM): ETF Research Reports
The Meet Kevin Pricing Power ETF (PP): ETF Research Reports
Communication Services Select Sector SPDR ETF (XLC): ETF Research Reports
ProShares Online Retail ETF (ONLN): ETF Research Reports
AXS Esoterica NextG Economy ETF (WUGI): ETF Research Reports
Meta Platforms, Inc. (META) : Free Stock Analysis Report
