Good Omen, or Bad? Tesla Opens Mag 7 Earnings Season to Mixed Reviews

Core Insights - The current earnings season is particularly noteworthy as the "Magnificent Seven" companies, including Tesla, are set to report their performance, influencing the broader market dynamics [1][2] - The Magnificent Seven, which includes Tesla, Microsoft, Meta, Alphabet, Amazon, Apple, and Nvidia, represents over one-third of the S&P 500's total market capitalization and is expected to outperform the broader market in earnings growth [2][3] Group 1: Magnificent Seven Performance - The Roundhill Magnificent Seven ETF has increased approximately 35% over the past year, significantly outperforming the S&P 500's 15% increase [2] - Analysts predict a collective earnings growth of 15% for the Magnificent Seven in the third quarter, compared to only 6.7% for the remaining 493 companies in the S&P 500 [2][3] - The earnings growth gap is narrowing, with expectations that the bottom 493 companies may start driving market gains by next year [2] Group 2: Individual Company Highlights - Tesla reported a revenue beat but fell short of profit expectations, with earnings per share at 50 cents versus the consensus of 55 cents, leading to a 2% drop in after-hours trading [3] - Nvidia is anticipated to be a significant contributor to S&P 500 earnings growth in the third quarter, benefiting from substantial AI investments [3] - Other companies like Coca-Cola and General Motors have also reported strong earnings, with 76% of S&P 500 companies exceeding earnings-per-share projections, surpassing the historical average of 68% [5]