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We get into the heart of the Q1 earnings season this week, with more than 850 companies reporting results, including four of the Magnificent 7 members and almost a third of S&P 500 members. We have Microsoft and Meta Platforms on deck to report results on Wednesday, July 30th, and Apple and Amazon on Thursday, July 31st.
The Mag 7 stocks have led the market's rebound from the April lows to new all-time highs, with this week's results giving market participants the most relevant pulse check to validate the group's recent performance.
The group still leads the market when we change the starting point of the above performance chart by a year. But while Apple still remains a laggard in that period, Microsoft and Alphabet change their positions.
Except for Apple, the four Mag 7 members reporting this week, along with Alphabet that reported strong results already and Nvidia whose results will not be out for another month, are all leaders in the artificial intelligence space and actively investing in setting up datacenters and related infrastructure that will enable them to run the large-language models.
A significant marker in the AI debate surrounding these companies has been the ever-rising level of capital expenditures, a trend that Apple has not participated in, which explains a substantial part of the stock's underperformance in the two earlier charts we shared.
Alphabet, which reported very strong results last Wednesday, raised its capital expenditures (capex) guidance for this year by $10 billion to $85 billion. The sentiment in the market is that Amazon, Meta, and Microsoft will also raise their capex outlays as they report results this week.
A couple of points about the Alphabet report that provides us with read-throughs about what to expect from Microsoft, Amazon, and Meta this week.
We saw a clear acceleration in the Google cloud business, which has traditionally been seen as behind Amazon and Microsoft. Google Cloud revenues increased +32% from the year-earlier period, accelerating from the preceding quarter's +28% growth pace. Management's commentary around the cloud business was very positive, likely indicative of a very favorable demand backdrop and some market share gains.
Amazon has experienced some capacity issues in its Amazon Web Services business lately, but it will be interesting to see if it and Microsoft perform as well on the cloud front as Alphabet did. Revenues in advertising, search, and YouTube came in better than expected, with +10.4% ad revenue growth providing strong momentum from Meta as well.
On an Alphabet-specific point, search revenues came in better than expected, up +12% from the same period last year. As we noted in this space last week, a significant part of the stock's valuation discount reflects concerns about the search business's ability to stay in the emerging AI world. We believe that the company's Q2 results on the search front should help alleviate some of those worries.
Looking at earnings expectations for the group as a whole, the expectation is that Mag 7 earnings will increase +14% in 2025 Q2 from the same period last year on +11.9% higher revenues. These expectations are a blend of actual results from Alphabet and Tesla, and estimates for the remaining five, of which four are scheduled to report this week.
As we discuss later in this note, there is a notable improving trend in estimates for the coming periods. We are seeing this favorable revisions trend for the Mag 7 companies as well, as the chart below shows.
We expect this positive revisions trend to accelerate for the Mag 7 group after their Q2 results this week.
Q2 Earnings Scorecard
Through Friday, July 25th, we have seen Q2 results from 168 S&P 500 members or 33.6% of the index's total membership. Total earnings for these companies are up +8.3% from the same period last year on +4.9% higher revenues, with 83.3% beating EPS estimates and 80.4% beating revenue estimates.
The EPS and revenue beats percentages are tracking notably above the historical averages for this group of 168 index members.
With 161 S&P 500 members on deck to report this week (32.2% of the index's total membership), we will have seen Q2 results from more than 65% of the index's total membership by the end of this week.
As we noted here last week, the overall picture emerging from the Q2 earnings season remains positive. It isn't simply companies beating estimates that were too low to begin with, a reflection of analysts sharply cutting estimates in the wake of the 'Liberation Day' tariff announcement.
There is also favorable management commentary about current business trends that has started showing up in estimates for Q3 and beyond.
For 2025 Q3, total S&P 500 earnings are currently expected to be up +4.8% from the same period last year on +4.7% higher revenues.
Since the start of July, Q3 estimates have inched up for 9 of the 16 Zacks sectors, with the biggest gains for the Energy, Finance, Tech, Autos, and Consumer Discretionary sectors. Estimates remain under pressure for the remaining 7 sectors, with the biggest weakness in the Medical, Basic Materials, Construction, Transportation, and Aerospace sectors.
Expectations for Q2 & Beyond
Looking at Q2 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total S&P 500 earnings are expected to be up +7.5% on +5% higher revenues. Had it not been for the Energy sector drag, Q2 earnings would be up +9.5% from the same period last year.
In terms of S&P 500 index 'EPS,' these growth rates approximate to $255.07 for 2025 and $288.04 for 2026.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Microsoft, Meta Platforms, Apple, Amazon, Alphabet and Nvidia are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – July 28, 2025 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Microsoft (MSFT - Free Report) , Meta Platforms (META - Free Report) , Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) and Nvidia (NVDA - Free Report) .
Mag 7 Earnings Loom: What Can Investors Expect?
We get into the heart of the Q1 earnings season this week, with more than 850 companies reporting results, including four of the Magnificent 7 members and almost a third of S&P 500 members. We have Microsoft and Meta Platforms on deck to report results on Wednesday, July 30th, and Apple and Amazon on Thursday, July 31st.
The Mag 7 stocks have led the market's rebound from the April lows to new all-time highs, with this week's results giving market participants the most relevant pulse check to validate the group's recent performance.
The group still leads the market when we change the starting point of the above performance chart by a year. But while Apple still remains a laggard in that period, Microsoft and Alphabet change their positions.
Except for Apple, the four Mag 7 members reporting this week, along with Alphabet that reported strong results already and Nvidia whose results will not be out for another month, are all leaders in the artificial intelligence space and actively investing in setting up datacenters and related infrastructure that will enable them to run the large-language models.
A significant marker in the AI debate surrounding these companies has been the ever-rising level of capital expenditures, a trend that Apple has not participated in, which explains a substantial part of the stock's underperformance in the two earlier charts we shared.
Alphabet, which reported very strong results last Wednesday, raised its capital expenditures (capex) guidance for this year by $10 billion to $85 billion. The sentiment in the market is that Amazon, Meta, and Microsoft will also raise their capex outlays as they report results this week.
A couple of points about the Alphabet report that provides us with read-throughs about what to expect from Microsoft, Amazon, and Meta this week.
We saw a clear acceleration in the Google cloud business, which has traditionally been seen as behind Amazon and Microsoft. Google Cloud revenues increased +32% from the year-earlier period, accelerating from the preceding quarter's +28% growth pace. Management's commentary around the cloud business was very positive, likely indicative of a very favorable demand backdrop and some market share gains.
Amazon has experienced some capacity issues in its Amazon Web Services business lately, but it will be interesting to see if it and Microsoft perform as well on the cloud front as Alphabet did. Revenues in advertising, search, and YouTube came in better than expected, with +10.4% ad revenue growth providing strong momentum from Meta as well.
On an Alphabet-specific point, search revenues came in better than expected, up +12% from the same period last year. As we noted in this space last week, a significant part of the stock's valuation discount reflects concerns about the search business's ability to stay in the emerging AI world. We believe that the company's Q2 results on the search front should help alleviate some of those worries.
Looking at earnings expectations for the group as a whole, the expectation is that Mag 7 earnings will increase +14% in 2025 Q2 from the same period last year on +11.9% higher revenues. These expectations are a blend of actual results from Alphabet and Tesla, and estimates for the remaining five, of which four are scheduled to report this week.
As we discuss later in this note, there is a notable improving trend in estimates for the coming periods. We are seeing this favorable revisions trend for the Mag 7 companies as well, as the chart below shows.
We expect this positive revisions trend to accelerate for the Mag 7 group after their Q2 results this week.
Q2 Earnings Scorecard
Through Friday, July 25th, we have seen Q2 results from 168 S&P 500 members or 33.6% of the index's total membership. Total earnings for these companies are up +8.3% from the same period last year on +4.9% higher revenues, with 83.3% beating EPS estimates and 80.4% beating revenue estimates.
The EPS and revenue beats percentages are tracking notably above the historical averages for this group of 168 index members.
With 161 S&P 500 members on deck to report this week (32.2% of the index's total membership), we will have seen Q2 results from more than 65% of the index's total membership by the end of this week.
As we noted here last week, the overall picture emerging from the Q2 earnings season remains positive. It isn't simply companies beating estimates that were too low to begin with, a reflection of analysts sharply cutting estimates in the wake of the 'Liberation Day' tariff announcement.
There is also favorable management commentary about current business trends that has started showing up in estimates for Q3 and beyond.
For 2025 Q3, total S&P 500 earnings are currently expected to be up +4.8% from the same period last year on +4.7% higher revenues.
Since the start of July, Q3 estimates have inched up for 9 of the 16 Zacks sectors, with the biggest gains for the Energy, Finance, Tech, Autos, and Consumer Discretionary sectors. Estimates remain under pressure for the remaining 7 sectors, with the biggest weakness in the Medical, Basic Materials, Construction, Transportation, and Aerospace sectors.
Expectations for Q2 & Beyond
Looking at Q2 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total S&P 500 earnings are expected to be up +7.5% on +5% higher revenues. Had it not been for the Energy sector drag, Q2 earnings would be up +9.5% from the same period last year.
In terms of S&P 500 index 'EPS,' these growth rates approximate to $255.07 for 2025 and $288.04 for 2026.
For a detailed view of the evolving earnings picture, please check out our weekly Earnings Trends report here >>>> Q2 Earnings Results Show An Improving Growth Picture
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Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.