🎁Mag 7 Earnings: Is "Better than Fear" Possible After GOOG's Beats?

$Alphabet(GOOG)$ surges nearly 6% after posting better-than-expected earnings

• Revenue: $90.23 billion vs. $89.12 billion estimated (Beat, +1.25%)

• EPS: $2.81 vs. $2.01 estimated (Beat, +39.8%)

Core business segments beat expectations with strong growth.

In Q1, Google’s advertising revenue reached $66.89 billion, up 8.5% YoY and above analyst forecasts. Search ad revenue rose 9.8% to $50.7 billion, and YouTube ad revenue grew 10% to $8.93 billion.

Google Cloud has become a new growth driver in recent years. Analysts generally believe that Google Cloud revenue will be a key engine of future growth. In Q1, cloud revenue increased 28% YoY to $12.26 billion. Google holds around 12% market share in this segment, ranking third globally behind Amazon and Microsoft.

Management comments that thanks to AI-driven improvements in marketing, ad conversion rates are rising.

What Should We Expect from Meta, Microsoft, Amazon, and Apple?

1. $Meta Platforms, Inc.(META)$

• Revenue: $41.4 billion, up 13.6% YoY (down from 20.6% in Q4 2024)

• EPS: $5.29, up 12.2% YoY (slowest EPS growth since Q1 2023)

Bank of America analysts recently noted that Meta may face “3% revenue exposure to Temu in the US” due to tariffs. Due to the concerns, Meta’s stock briefly dropped below $500. However, Google’s strong ad revenue could be a positive signal for Meta.

From a valuation perspective, Meta ranks second cheapest across almost all metrics, while Google is slightly cheaper on core P/E, EV/EBITDA, and P/S. Meta’s PEG ratio is actually lower than Google’s.

2. $Microsoft(MSFT)$

• Revenue: $68.38 billion, up 10.6% YoY

• EPS: $3.20, up 8.8% YoY

Microsoft has made headlines this year for being more cautious with AI data center investments. However, analysts say Microsoft and Salesforce are among the software companies best positioned to manage higher tariffs.

3. $Amazon.com(AMZN)$

• EPS: $1.37, up 21.2% YoY

• Revenue: $154.56 billion, up 7.9% YoY

Barclays analysts said, “Amazon is probably the best-positioned company in retail and e-commerce to take advantage of the chaotic situation from tariffs and shifting global supply chains.”

4. $Apple(AAPL)$

• EPS: $1.60, up 4.6% YoY

• Revenue: $93.56 billion, up 3.1% YoY

Apple is highly exposed to Trump-era tariffs, as roughly 75% of its revenue comes from selling devices primarily manufactured in Asia.

Can Mag 7 Deliver Better-Than-Feared Earnings This Season?

Several of the “Magnificent 7” stocks have been key drivers of S&P 500 earnings growth in recent quarters. However, analysts forecast the group will report 15.9% YoY earnings growth for calendar year 2025, compared to 36.5% growth in 2024.

Some analysts believe market expectations are being downgraded more rapidly than in 2022, increasing the chance for “better-than-feared” results in the short term.

However, if earnings growth slows to single digits and trade tensions persist, valuation compression is still likely. The key will be whether a trade deal materializes — any deal would immediately be interpreted as “better than feared.”

How do you expect Mag 7 earnings?

Is better than fear possible?

How will market react next week?

Which one of Mag 7 are you bullish the most?

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