With NVIDIA reporting actual results for Q2 on August 27, all the companies in the “Magnificent 7” have now reported earnings for the second quarter. How did the earnings reported by these seven companies perform relative to analyst expectations and year-ago results?
On June 30, the estimated earnings growth rate for the “Magnificent 7” companies for Q2 was 13.9%. Overall, 100% (7 out of 7) of the “Magnificent 7” companies reported a positive EPS surprise, compared to 81% for all S&P 500 companies. In aggregate, earnings reported by the “Magnificent 7” companies exceeded estimates by 10.5%, compared to 7.7% for all S&P 500 companies.
As a result, the “Magnificent 7” companies reported actual earnings growth of 26.6% for the second quarter. This earnings growth rate is slightly below the average earnings growth rate of 31.0% for these seven companies over the previous four quarters.
In addition, four of the “Magnificent 7” companies (NVIDIA, Amazon.com, Meta Platforms, and Microsoft) are among the top six contributors to earnings growth for the S&P 500 for the second quarter. Outside of these four companies, Warner Bros. Discovery and Vertex Pharmaceuticals are the other top contributors. Both of these companies benefitted 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
Looking ahead, analysts still expect lower earnings growth for the “Magnificent 7” companies over the next four quarters compared to Q2 2025. For Q3 2025 through Q2 2026, analysts are predicting earnings growth rates of 14.5%, 14.5%, 14.5%, and 16.8%, respectively.
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*Not in order of contribution
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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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