Is the Magnificent Seven's Earnings Edge Fading?

Core Insights - The Magnificent Seven, a group of leading companies in the S&P 500, may be approaching the end of their exceptional earnings growth period [2] - Nvidia is the only company from the Magnificent Seven expected to be among the top five contributors to S&P 500 earnings growth in the third quarter [3][7] - The earnings growth of the Magnificent Seven is moderating, with an estimated growth of 14.9% last quarter, compared to 6.7% for the rest of the S&P 500 [8] Group 1: Earnings Performance - Nvidia and Micron are expected to report significant earnings growth of 53% and 157% respectively, highlighting the impact of artificial intelligence demand [4] - Eli Lilly, Intel, Boeing, and Micron are also expected to contribute significantly to index-level profit growth this quarter [4] - The gap between the earnings growth of the Magnificent Seven and the rest of the S&P 500 is narrowing, indicating a shift in profitability dynamics [7] Group 2: Market Impact - The strong earnings growth of the Magnificent Seven has been a key driver of stock market gains over the past few years [5] - As growth slows for these companies, the profitability of other S&P 500 companies will become more significant in forecasting the index's future value [5] - Tesla is expected to report its fourth consecutive quarter of earnings contraction, influenced by inflation and high borrowing costs [8]