Mag-7 Earnings: Trick or Treat for ETF Investors?

Core Insights - The Magnificent Seven (Mag 7) companies are crucial to the S&P 500's tech exposure, contributing to about one-fourth of all S&P 500 earnings [1] - Excluding the Mag 7 group's earnings, the S&P 500 index's Q3 earnings would show a 6.1% increase year-over-year, compared to a 7.3% increase including the Mag 7 [1] Group Performance - The Mag 7 group's Q3 earnings are projected to rise by 11.5% year-over-year, driven by a 15.4% increase in revenues, following a previous quarter's earnings growth of 26.4% on 15.5% revenue growth [2] - Amazon (AMZN) reported stronger-than-expected Q3 results, with revenues and profits exceeding estimates, leading to a pre-market surge of over 12% [2] - Apple (AAPL) shares increased by 1.9% after reporting Q4 results that surpassed earnings and revenue estimates, although iPhone sales and China revenues fell short of expectations [3][4] - Microsoft reported fiscal Q1 results that exceeded expectations, with a 40% increase in its Azure cloud business, although shares fell nearly 3% due to hints of increased capital expenditures [5] - Meta (META) experienced an 11.3% drop in shares despite beating revenue estimates, attributed to a significant tax charge impacting earnings [6][7] - Alphabet (GOOGL) shares rose by 2.5% after surpassing revenue and earnings estimates, with Google Cloud revenues increasing by 33.5% [8] Future Outlook - Meta anticipates "notably larger" capital expenses next year due to substantial investments in AI, adjusting its capex guidance to between $70 billion and $72 billion [7] - NVIDIA (NVDA) is set to report earnings on November 19, 2025, and has recently achieved a $5 trillion market cap, supported by various partnerships and projects in AI and robotics [10][11] - The overall sentiment among the Mag 7 companies reflects a strong commitment to AI investments, with many companies, including Amazon, Alphabet, and Microsoft, planning aggressive capital expenditures [12][13] Investment Opportunities - ETFs such as Roundhill Magnificent Seven ETF (MAGS), MicroSectors FANG+ ETN (FNGS), Vanguard Mega Cap Growth ETF (MGK), and Invesco S&P 500 Top 50 ETF (XLG) are highlighted as potential investment vehicles, with MAGS outperforming the S&P 500 despite recent market fluctuations [14]