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 second quarter?
The answer is yes. Overall, the blended earnings growth rate for the S&P 500 for Q2 2025 is 5.6%. The top six contributors to year-over-year earnings growth for the S&P 500 for Q2 (in order of contribution) are Warner Bros. Discovery, NVIDIA, Vertex Pharmaceuticals, Microsoft, Broadcom, and Alphabet. Thus, three of the top six contributors to year-over-year earnings growth for the index for the second quarter are “Magnificent 7” companies. Outside of these three companies, both Warner Bros. Discovery and Vertex Pharmaceuticals are benefitting from easy comparisons to weaker earnings reported in the year-ago quarter due to charges and expenses that were included in their year-ago EPS.
In aggregate, the “Magnificent 7” companies are expected to report year-over-year earnings growth of 14.1% for the second 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 3.4% for Q2 2025.
Looking ahead, analysts expect lower earnings growth for the “Magnificent 7” companies over the next three quarters relative to Q2 2025. For Q3 2025 through Q1 2026, analysts are predicting earnings growth rates for these seven companies of 9.5%, 11.0%, and 11.2%, respectively. On the other hand, analysts expect higher earnings growth for the other 493 companies over the next three quarters relative to Q2 2025. For Q3 2025 through Q1 2026, analysts are projecting earnings growth rates for these 493 companies of 6.8%, 5.3%, and 10.8%, respectively.
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*Not in order of contribution
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This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.
Insight/Author%20Bios/JohnButters2.jpg)
Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).
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The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.
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