Breaking Down the Mag 7 Earnings Outlook

Core Insights - The Magnificent 7 stocks have recently lost their leadership position, with rising capital expenditures becoming a concern for investors [2][4] - Meta Platforms is the only stock in the group showing positive performance, while Tesla has seen a significant decline in value [4] - Earnings expectations for the Magnificent 7 group indicate a slowdown compared to previous periods, with Q1 2025 earnings expected to grow by 13.1% [5][10] Earnings Outlook - Total earnings for the S&P 500 in Q1 2025 are projected to increase by 5.9% year-over-year, driven by a 3.7% rise in revenues [5][22] - The Magnificent 7's earnings for Q1 2025 are expected to rise by 13.1% on 11.9% higher revenues, contrasting with a more modest growth for the rest of the index [10][11] - For the full year 2025, the Magnificent 7 is anticipated to generate $556.1 billion in earnings, up from$493.7 billion in 2024 [11] Sector Performance - The Tech sector continues to be a significant growth driver, with Q1 2025 earnings expected to increase by 12.4% year-over-year [14][15] - Despite a generally positive outlook, recent data indicates that earnings estimates for the Tech sector have come under pressure since January 2025 [16][23] - In 2025, nearly all sectors are expected to experience earnings growth, with six sectors projected to achieve double-digit growth [26]