Nvidia's Earnings: The Final Piece in the Magnificent Seven Puzzle

The Magnificent Seven companies, a group of high-performing stocks, have reported quarterly earnings with only Nvidia remaining. Markets AM writer Spencer Jakab discusses the potential for further growth with Heard on the Street's Asa Fitch. Despite some disappointing results, the group remains a strong performer, fueled by AI-mania.

The Magnificent Seven, a group of high-performing tech stocks, has been in the spotlight for its quarterly earnings reports. Despite mixed results, the group continues to show promise, driven largely by the AI revolution. Asa Fitch, a Markets AM writer, discussed the potential for further growth with Spencer Jakab, highlighting the significant impact of AI on the tech sector.

Microsoft and Meta Platforms delivered strong earnings, with Microsoft's Azure cloud and AI infrastructure driving growth. Microsoft's earnings per share hit $3.65, beating estimates by $0.30, and revenues climbed 18% YoY to $76.4 billion. Meta also reported robust earnings, with EPS of $7.14, revenues jumping 22% to $47.5 billion, fueled by AI-driven ad technologies [1].

NVIDIA, the only company to report earnings among the Magnificent Seven, saw its stock price drop following the release of its earnings report. However, the company remains a key player in the AI space, with its graphics processing units (GPUs) being crucial for AI computing. NVIDIA's earnings per share were $1.42, down from $1.54 in the previous quarter, but the company's revenue grew 20% YoY to $10.9 billion [2].

The AI boom is still in its early stages, with the global AI market expected to explode from $189 billion in 2023 to $4.8 trillion by 2033, a 25-fold increase [1]. This growth is driving significant investment in data centers, with companies like Microsoft, Google, and Amazon spending billions on AI infrastructure. Microsoft plans to spend $80 billion on AI infrastructure in 2025, joining Google and Amazon in a multi-billion-dollar arms race to dominate the AI future [1].

Despite some disappointing results, the Magnificent Seven remains a strong performer, fueled by AI-mania. The group's focus on AI and related technologies positions it well for future growth. Investors should continue to monitor the earnings reports and the broader trends in the AI space for opportunities in this sector.

References:
[1] https://finance.yahoo.com/news/spending-ai-data-centers-massive-150110727.html
[2] https://www.theglobeandmail.com/investing/markets/stocks/NVDA/pressreleases/33854610/the-zacks-analyst-blog-highlights-nvidia-roundhill-magnificent-seven-etf-microsectors-fang-etn-technology-select-sector-spdr-fund-vanguard-information-technology-index-fund-etf/