Magnificent 7 Stocks Earnings Beats Fuel Markets

Tom Gentile

Posted in
Big Picture

By: Tom Gentile
February 2nd, 2024

3 mins read

What comes to mind when you hear the term Big Tech or Major Tech Companies? Nowadays it is a group of stocks called the Magnificent 7 or Mag-7.

The Magnificent 7 Stocks
The Magnificent 7 Stocks

The S&P 500 is trading at or near all-time highs, even after recent comments from Fed Chair Powell saying he is uncertain if the Fed will perform their first rate cut in quite some time this coming March.

The market sold off that day from its highs only to reach and, at the time of this writing, reach new all-time highs today, February 02, 2024.

The cause or at least a major cause for this has to be attributed to the positive earnings reports coming from Big Tech or the Mag-7.

Mag-7 Earnings Info 

Meta Platforms, Inc. (META)

Beat on their eps projections, announced a $50 Billion, (with a B) buyback program and announced they’ll pay a dividend for the first time ever. The stock was up 21% after those announcements.

Amazon.com, Inc. (AMZN)

Exceeded eps expectations by reporting a $1.01 eps vs. $0.81. Revenue was reported at $169.96 billion vs. the estimate of $166.04 billion. They also saw a price target raised by an analyst from $170 to $215.

Apple, Inc. (AAPL)

Reported eps of $2.18 per share on revenue of $119.58 billion vs. expectations of $2.09 per share and revenue of $118.00 billion.

The same analyst who raised the price target for AMZN, Brian White from Monness, maintained the buy rating on Apple (AAPL) with a price target of $200.00. Robert W. Baird along with Brian White maintained his Buy rating and price target of $200.

Microsoft Corporation (MSFT)

They beat on eps and revenue estimates as well. Reported earnings came in at $2.93 per share on revenue of $62.02 billion vs. estimate of $2.76 per share on revenue of $61.03 billion.

They had a price target increase from $430 to $475.

Not all of the Mag-7 had earnings beats, as Alphabet, Inc. (GOOGL) and Tesla, Inc. (TSLA) missed.

NVIDIA Corporation

Due to report February 21, 2024, After market Close (AMC).

That puts the results at 4 of 6 Mag-7 stocks beating estimates with NVDA yet to report.

Magnificent 7 Stocks Impact on the Markets

While I am a strong believer is strength begets more strength when it comes to price momentum in the markets, I have to be concerned that the gains in the S&P 500 are predominantly due to the price performance of these 7 stocks.

Research I find from Goldman Sachs and others is the Magnificent Seven stocks have gained 71%.

Compare that to the other 493 stocks which have a combined performance gain of only 6%. When you look at the benchmark index’s market cap distribution (which allows larger stocks to contribute more to the index’s price movement), the S&P 500 has seen a gain of about 19% this year.

SPY 09-26-23 through 02-01-24
SPY 09-26-23 through 02-01-24

Options Offer Opportunity if Magnificent 7 Prices Too High

If the Mag-7 are priced outside of your comfort range, you have the opportunity to trade options on them.

Remember a Call option contract gives one the right, but not the obligation to buy a stock on or before a specific date at a specific price.

What my team and I love to do is buy an option (to open) at one price with the goal to later sell it (to close) at a higher price and pocketing the profit when we do. 

Tom Gentile
C1P: Chief 1-Percenter

App: Toms Option Tools

Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.


Disclaimers

Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:  http://www.tomgentile.com/legal_disclaimers.html.

Sign Up Now for Free Education!