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The “Magnificent 7”, , , , , , , and , have once again proven why they dominate investor attention. Six of the seven have now reported Q3 results, and while the group continues to deliver blockbuster growth, the gap between winners and laggards is widening fast. The Group Picture: Strong Numbers, Clear Divergence Across the Magnificent 7, Q3 earnings are tracking +26.7% year over year on +17.6% higher revenue, following last quarter’s +26.4% on +15.5%. Those are spectacular numbers by any standard. But the split beneath the surface tells the real story - Tesla’s earnings plunged 39.5%, while Alphabet surged 33%. Investors seem increasingly pragmatic about massive AI and cloud infrastructure spending. The tolerance is there, but only if those billions deliver measurable results. That’s why Amazon and Alphabet were rewarded, while Microsoft and Meta saw more muted reactions. Amazon and Alphabet: Execution Leads the Pack Amazon delivered one of its best quarters in years. EPS came in at $1.95, a 24% beat, on revenue of $180.2 billion (+13% YoY). The highlight was AWS, which reaccelerated to +20% growth, the fastest pace in several quarters. Investors cheered Amazon’s ability to translate its aggressive AI and data center buildout into clear top-line momentum. Alphabet crossed a historic threshold, reporting its first-ever $100 billion quarter. Cloud revenue climbed +34%, while YouTube and Search both topped estimates. The company raised full-year capex to as much as $93 billion, reinforcing its commitment to AI leadership. The market rewarded the clarity ass shares jumped. Microsoft: Strong Quarter, Softer Outlook Microsoft once again delivered solid results - EPS of $4.13 beat by 13%, and Azure grew +26% YoY. But management’s December-quarter guidance pointed to slower growth ahead, even as FY26 capex ramps up sharply to expand AI capacity. At this stage, investors want proof that big spending equals sustainable margin expansion. Microsoft’s AI moat is deep, but capacity constraints remain the bottleneck. Execution, not ambition, will determine the next leg of multiple expansion. Meta: Good Fundamentals, Bad Optics Meta’s results were better than the market reaction suggested. Revenue hit $51.2 billion (+4% above consensus) and EPS reached $7.25, yet shares fell 8%. The culprit? A $15.9 billion one-time tax charge and higher 2026 capex guidance. The irony is that the tax hit actually improves future cash flow, but markets didn’t care. Daily active users rose to 3.54 billion, ad demand remains strong, and the company is investing heavily in AI. Still, without a clear revenue engine like AWS or Google Cloud, investors are struggling to see how those investments will pay off near term. Apple: Excitement Returns After a few quiet quarters, Apple suddenly feels exciting again. EPS came in at $1.85 (vs. $1.77 expected) on $102.5 billion in revenue (+8% YoY). CEO Tim Cook called iPhone 17 demand “off the chart,” projecting 10–12% revenue growth for the December quarter, potentially the biggest in Apple’s history. Services revenue grew 15%, margins beat expectations at 47.2%, and the company managed to absorb Trump-era tariffs without denting profitability. With China expected to return to growth and a new AI-powered Siri on the horizon, Apple looks poised for renewed momentum heading into 2026. Tesla and Nvidia Tesla’s Q3 showed the downside of scale in a cyclical market, earnings down nearly 40%, pressured by price cuts and margin compression. AI and autonomous driving remain long-term drivers, but near-term profitability is clearly under pressure. Nvidia is the final piece still to come. Expectations are sky-high, with analysts projecting another triple-digit growth quarter from the data center segment. The result could set the tone for the entire AI trade heading into year-end. A recent run of exciting partnerships annouced at their DC event, have set up for fireworks. Market Concentration: Impressive but Risky Collectively, the Magnificent 7 are on pace to deliver about 25% of all S&P 500 earnings in 2025, up from 18% in 2023, while commanding 35% of the index’s total market cap. If treated as a standalone sector, they’d sit just behind Technology (45%) and well ahead of Financials (12.6%). That concentration is both a strength and a risk. These companies drive the market’s resilience, but they also amplify its vulnerability. When one stumbles, the whole index feels it. The Takeaway: Proof Over Promises The Magnificent 7 remain the most powerful force in global equities, but this earnings season marked a shift. Investors are rewarding execution and efficiency over hype. The winners, Amazon, Alphabet, and Apple, combined strong growth with evidence that AI spending is translating into measurable returns. Meanwhile, Microsoft and Meta are being asked to show more proof before the market re-rates them.
