Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Fantastic Seven, Magic Seven or the seven snipers. No matter what we call them, these companies and their shares have grown to such an extent that they distort everything around them, influencing the movement of global capital markets, pricing, and profit expectations. Companies publish their latest numbers one after the other, and investors react sensitively to them. We show you what is worth knowing.
We will also deal with these seven stocks at our next investment conference, Portfolio Investment Day 2024, where we will discuss with professionals and investors what is worth investing in now. The event is free after registration, register here.
The numbers are coming
American companies publish their first-quarter quick reports one after the other, and the Fantastic Seven companies also report this week.
We are already over Tesla’s report, the quarter did not go very well, sales decreased, sales revenue fell by 9 percent, which has not been seen since 2012, and profit decreased.
Meta’s quick report is coming after the market close today, based on analysts’ expectations, revenue may increase by more than a quarter, and profit may double.
The latest figures from Microsoft and Alphabet arrive after the market closes on April 25. Microsoft’s revenue and profit may increase by nearly 15 percent, Alphabet’s revenue may increase by 13 percent, and its profit by 27 percent.
After the market closed on April 30, Amazon reports that revenue increased by 12 percent and profit by 174 percent in the first quarter of this year.
Next week, on Thursday, May 2, Apple’s numbers will come, the company (along with Tesla) is out of the Fantastic Seven, revenue may have decreased by 5 percent, profit by 4 percent.
Due to its financial quarter being delayed by a month, Nvidia reports later than the others, on May 22, the company is in an amazing growth phase, revenue jumped by 240 percent and profit by 408 percent in one year.
They are galactic
We have already written several times about how these seven stocks are practically unavoidable and in many ways have become a driving factor in the global capital markets. Now we show another aspect:
It is also worth giving priority to the seven companies, because their income and profits have grown enormously in recent years. The combined revenue of the seven companies in the first quarter of this year may be 454 billion dollars, which is 12 percent more than a year ago. There is a strong intra-year seasonality, the last quarter of the year is always outstanding, it is worth mentioning that the growth is so great that the current first quarter income is almost as big as the strongest fourth quarter of 2022.
The companies’ profit was close to one hundred billion dollars, which would be the second best quarterly result of all time, 37 percent higher than a year ago.
Nvidia carries everything
Nvidia also plays a prominent role within the Fantastic Seven, and it accounts for most of the growth within the stock group.
The revenue of the seven companies may increase by 12 percent in the quarter, but within this there is a large deviation: we already know that Tesla’s revenue fell by 9 percent, Apple’s analysts expect a 5 percent decline, and the other stocks typically see double-digit growth. Nvidia, on the other hand, stands out with its 240 percent increase.
The variance in profit is even greater: while Tesla’s profit decreased and Apple’s result may have also decreased, Meta’s profit may have doubled in the quarter, and Nvidia’s may have jumped fivefold.
What does this mean in absolute terms? Analysts expect Nvidia to see a profit increase nearly as large as that of Meta and Amazon.
There is a big difference in profitability between the companies, while Amazon accounts for nearly a third of the total revenue of the seven companies, and its profit share is only 9 percent. And while Nvidia’s $24 billion revenue represents only a 5 percent share of total revenue, with its $14 billion profit, the chip manufacturer accounts for one seventh of the seven companies’ profits.
It doesn’t work without the Fantastic Seven
The seven tech stocks distort practically everything around them, such as revenue and profit expectations, and through this, obviously, the pricing of the entire market.
While the profit of the Fantastic Seven companies could increase by 37 percent in the first quarter, the profit of the companies belonging to the S&P 500 index, which represents the broader American stock market, could only increase by 0.5 percent.
If we look at the profit of the remaining S&P 500 companies without the week, it would already show a 6 percent decrease in the quarter.
Cover image credit: Darren Robb via Getty Images
