Magnificent 7 Post Earnings: Who’s Leading the Race?
Among the prominent titans, five have recently unveiled their earnings, showcasing a collective market capitalization surpassing $12.75 trillion. This figure not only dwarfs entire nation’s stock markets but has been a key driver for 70% of the US stock market’s November gains. Interestingly, Microsoft (NASDAQ: MSFT) has overtaken Apple (NASDAQ: AAPL) in the ongoing valuation battle, boasting a market cap of $3.04 trillion against Apple’s $2.84 trillion.
Despite Microsoft claiming the crown in terms of market cap, its stock performance tells a slightly different story. Particularly, Meta Platforms Inc (NASDAQ: META) has shown an exceptional performance, tripling the gains of its nearest competitor over the past year.
META’s incredible 153% surge within a year starkly compares to Microsoft’s 54% and Apple’s 23%, highlighting Meta’s dominance. Notably, since the year’s start, META has also escalated by 38%, significantly outpacing Amazon (NASDAQ: AMZN) and Microsoft with their 14% and 10% increases, respectively.
Mark Zuckerberg’s strategic decisions in 2023, including four rounds of layoffs reducing the Meta workforce by 22%, have seemingly paid off. The company’s focus on AI, messaging, the metaverse, and Reels has contributed to a remarkable $40.11 billion in Q4 revenue, a 25% increase year-over-year.
Reels’ resharing crossing 3.5 billion and Meta’s Reality Labs hitting $1 billion in revenue for the first time mark significant milestones. Furthermore, Meta’s aggressive $50 billion stock buyback program and its inaugural quarterly dividend reflect its robust financial posture and optimistic outlook.
Amazon and Meta saw their stocks soar following their earnings release, with Amazon achieving a 6.7% jump and Meta a notable 20% uptick. Amazon’s triumph in exceeding expectations with $1.00 EPS against the projected 80 cents, and posting $170 billion in revenue against a $166.2 billion forecast, signifies its robust performance.
Microsoft’s 18% year-over-year revenue increase to $62 billion and Azure’s 20% growth to $25.9 billion, although impressive, did not spark a significant stock uplift, hinting at heightened investor expectations.
Alphabet (NASDAQ: GOOGL) and Apple faced mixed fortunes. Alphabet raised its revenue by 13% to $86.3 billion, whereas Apple, despite growth in its iPhone and services sectors, saw a modest 2% rise in quarterly revenue. The struggle in Apple’s wearables segment and potential challenges for its AR/VR headset further cloud its outlook.
The financial trajectories of these tech giants highlight a competitive yet varied landscape as they navigate through 2023 and into 2024. With robust strategies and innovative expansions, the race among the Magnificent 7 continues, with Meta and Amazon currently leading the pack.
