With NVIDIA reporting actual results for Q1 on May 28, all the companies in the “Magnificent 7” have now reported earnings for the first quarter. How did the earnings reported by these seven companies perform relative to analyst expectations and year-ago results?
On March 31, the estimated earnings growth rate for the “Magnificent 7” companies for Q1 was 16.0%. Overall, 86% (6 out of 7) of the “Magnificent 7” companies reported a positive EPS surprise, compared to 78% for all S&P 500 companies. In aggregate, earnings reported by the “Magnificent 7” companies exceeded estimates by 14.9%, compared to 8.2% for all S&P 500 companies.
As a result, the “Magnificent 7” companies reported actual earnings growth of 27.7% for the first quarter. This earnings growth rate is slightly below the average earnings growth rate of 32.1% for these seven companies over the previous three quarters.
In addition, three of the “Magnificent 7” companies (Alphabet, Amazon.com, and NVIDIA) are among the top 5 contributors to earnings growth for the S&P 500 for the first quarter. Outside of these three companies, Bristol Myers Squibb and Gilead Sciences are the other top contributors. Both Bristol Myers Squibb and Gilead Sciences benefitted 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.
Despite the strong performance in the first quarter, analysts still expect lower earnings growth for the “Magnificent 7” companies over the next four quarters. For Q2 2025 through Q1 2026, analysts are predicting earnings growth rates of 14.0%, 8.9%, 10.6%, and 10.2%, respectively.
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*Not in order of contribution
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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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