- As Q1 results from major tech companies roll in, the ‘Magnificent 7’ group, including Apple, Amazon, and Nvidia, show impressive growth numbers.
- Despite sub-par growth from Tesla and Apple, the group’s earnings contribution has kept the S&P 500 index from negative territory.
- With Nvidia’s results still awaited, total Q1 earnings for the group are expected to rise by 49% from the same period last year.
Explore the Q1 results of the ‘Magnificent 7’ tech companies and their impact on the S&P 500 index. Understand the earnings power of these mega-cap players and the future outlook for the technology sector.
Impressive Q1 Results from the ‘Magnificent 7’
The ‘Magnificent 7′ group, comprising major tech companies like Apple, Amazon, and Nvidia, has shown impressive top- and bottom-line growth numbers in Q1. Despite sub-par growth numbers from Tesla and Apple, the group’s substantial earnings contribution has kept the S&P 500 index from dipping into negative territory. The market reaction to Tesla and Apple’s releases has been positive, as both companies’ results proved better than what market participants had feared.
Anticipated Growth with Nvidia’s Results
With Nvidia’s results still awaited, total Q1 earnings for the group are expected to rise by 49% from the same period last year on 13.6% higher revenues. The ‘Magnificent 7’ companies currently account for 29.9% of the S&P 500 index’s total market capitalization and are expected to bring in 21.2% of the index’s total earnings in 2024. Given their enormous earnings power and growth profile, it is hard to argue with the group’s market leadership.
Outlook for the Technology Sector
Beyond these mega-cap players, total Q1 earnings for the Technology sector as a whole are expected to be up 28.2% from the same period last year on 8.9% higher revenues. Looking at Q1 as a whole, total S&P 500 earnings are expected to be up 5.3% from the same period last year on 4.3% higher revenues. The Tech and Energy sectors are having opposite effects on the aggregate growth picture. Excluding the Tech sector, Q1 earnings for the rest of the index would be down -2.2%, while the growth pace improves to +8.3% on an ex-energy basis.
Conclusion
The ‘Magnificent 7’ tech companies continue to show impressive growth, contributing significantly to the S&P 500 index. With the tech sector expected to see a rise in Q1 earnings, the future outlook remains positive. However, the impact of the energy sector on the aggregate growth picture cannot be ignored.
