Are “Magnificent 7” Companies Still Top Contributors to Earnings Growth for the S&P 500 for Q1?

A number of the companies in the “Magnificent 7” have been top contributors to year-over-year earnings growth for the S&P 500 in recent quarters. Are companies in the “Magnificent 7” still expected to drive earnings higher for the S&P 500 for the first quarter?

Overall, the blended earnings growth rate for the S&P 500 for Q1 2025 is 7.2%. The top 5 contributors to year-over-year earnings growth for the S&P 500 for Q1 (in order of contribution) are Bristol Myers Squibb, NVIDIA, Gilead Sciences, Amazon.com, and Broadcom. Thus, two of the companies in the “Magnificent 7” are projected to be among the top 5 contributors to year-over-year earnings growth for the quarter. Outside of these two “Magnificent 7” companies, both Bristol Myers Squibb and Gilead Sciences are benefitting from easy comparisons to weaker (non-GAAP) earnings reported in the year-ago quarter due to IPR&D and other charges that were included in their non-GAAP EPS.

In aggregate, the “Magnificent 7” companies are expected to report year-over-year earnings growth of 14.8% for the first quarter. Excluding these seven companies, the blended (combines actual and estimated results) earnings growth rate for the remaining 493 companies in the S&P 500 would be 5.1% for Q1 2025.

Overall, analysts expect the S&P 500 to report earnings growth of 10.0% for CY 2025 compared to earnings growth of 10.6% for CY 2024. Analysts predict the companies in the “Magnificent 7” in aggregate will report (year-over-year) earnings growth of 15.9% for CY 2025 compared to earnings growth of 36.5% for CY 2024. On the other hand, analysts project the other 493 companies will report (year-over-year) earnings growth of 8.3% for CY 2025 compared to earnings growth of 4.9% for CY 2024. Thus, analysts expect lower earnings growth from the “Magnificent 7” companies and higher earnings growth from the other 493 companies for 2025 relative to 2024.

The FactSet Earnings Insight report was published one day early this past week.

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