Wall Street Braces for ‘Magnificent 7’ Earnings Season Amid Market Turmoil

Tesla Motors will begin the first-quarter earnings season on April 22.

(L-R) Meta CEO Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Alphabet CEO Sundar Pichai, and Tesla CEO Elon Musk attend the inauguration ceremony of Donald Trump as the 47th U.S. president in the Capitol Rotunda in Washington, on Jan. 20, 2025. Julia Demaree Nikhinson/AFP

Big Tech will start its quarterly earnings season on April 22 as investors brush themselves off after a sharp selloff to begin the trading week.

Market watchers will attempt to determine the future impact on companies’ bottom lines. It might not be easy to deduce, as the tech industry’s megacap companies will likely express an old refrain: uncertainty.

The “Magnificent Seven” stocks—Amazon, Alphabet, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla Motors—have not been immune to the tariff-fueled chaos on Wall Street after dominating the stock market for the past few years.

Over the past few months, these top stocks have wiped out trillions of dollars in investor wealth and weighed on the leading benchmark averages.

Alphabet, Amazon, Google, and Nvidia have plummeted more than 20 percent. Meta and Microsoft have fallen 19 percent and 14 percent, respectively.

The tech-heavy Nasdaq Composite Index briefly slipped into a bear market—a financial term for a stock down 20 percent from its all-time closing high—and is now trading in correction territory. The broader S&P 500 Index is also in a correction zone, falling 12 percent year to date.

Despite the sea of red seeping through the financial markets, the Magnificent Seven stocks are anticipated to report year-over-year earnings growth of nearly 15 percent, according to John Butters, a senior earnings analyst at FactSet Insights. By comparison, the other 493 S&P companies are expected to record 5.1 percent year-over-year earnings growth.

Other analysts project similar numbers. Zacks Research, for example, estimates first-quarter earnings rising 13.1 percent from a year ago on an 11.9 percent increase in revenues.

At the same time, the year could mark a shift in earnings growth.

“Analysts expect lower earnings growth from the ‘Magnificent 7’ companies and higher earnings growth from the other 493 companies for 2025 relative to 2024,” Butters said in a note.

Experts say these megacap stocks could be losing their luster among hedge funds and investors.

According to Morgan Stanley, international hedge funds reduced their exposure to the Magnificent Seven to a two-year low last week. Likewise, an April Bank of America survey found that being long the Magnificent Seven was no longer the most crowded trade in the market, with gold dethroning these companies.

In an April 10 note, East Capital executives said they have been exploring opportunities outside the tech industry.

“We have been rotating out of tech names into high-quality non-tech companies that exhibit strong growth yet trade at attractive valuations,” they wrote.

But while this will be one of the most critical earnings seasons in recent memory, any headlines coming out of Washington could quickly push aside these quarterly results, says Jay Woods, chief global strategist at Freedom Capital Markets.

“I wish we could say that we could focus on these earnings, but at the end of the day, the overall picture is still going to be guided by tariff policy in Washington,” Woods said in a note emailed to The Epoch Times. “It’s too big of a weight around the ankles of some of these companies looking to try to get a tire.”

Indeed, the financial markets have been flooded with announcements from the White House and comments from the Federal Reserve.

People take part in a protest against Tesla in New York City, on March 29, 2025. Samira Bouaou/The Epoch Times

U.S. stocks dropped on April 21 after the president repeated his criticisms of Federal Reserve Chair Jerome Powell and warned of an economic slowdown unless the central bank immediately cut interest rates.

Tesla Begins First Quarter

Tesla’s April 22 release of its numbers may set the tone for the rest of the first-quarter earnings season.

Shares of Tesla are down 40 percent this year as the company registered its worst quarterly performance since 2022.

“Tesla remains one of the most volatile and discussed stocks in the world,” Woods said. “Elon Musk’s political bent has made this stock a lightning rod of discussion.”

The electric vehicle maker has recently faced an onslaught of challenges, from declining sales to potential cost pressures from tariffs.

Tesla sales tumbled 13 percent in the first quarter, delivering 336,681 vehicles.

“Thank you to all our customers, employees, suppliers, shareholders, and supporters who helped us achieve these results,” the company said.

The trend has been most pronounced overseas. According to the European Automobile Manufacturers’ Association, sales cratered 49 percent in the first two months of 2025.

Potential cost pressures from tariffs threaten the company’s bottom line.

In January, Tesla CFO Vaibhav Taneja told shareholders in the fourth-quarter earnings call that the new administration’s levies would “impact our business and profitability.”

“There’s a lot of uncertainty around tariffs,” he said. “Over the years, we’ve tried to localize our supply chain in every market, but we are still very reliant on parts from across the world for all our businesses. Therefore, the imposition of tariffs, which is very likely, will have an impact on our business and profitability.”

Musk has weighed in on the tariff discussion, telling Matteo Salvini, Italy’s deputy prime minister, that he hopes for a “zero tariff situation” between the United States and the European Union. He also criticized Peter Navarro, the administration’s senior counselor for trade and manufacturing.

All this comes as Musk faces political backlash for supporting President Donald Trump and championing the Department of Government Efficiency (DOGE).

“It will be interesting to see how the numbers look and what, if any, guidance may be given when they report Tuesday afternoon,” Woods said.

The consensus forecast anticipates a 27 percent upside to Tesla shares over the next 12 months. However, many market analysts have also lowered their targets for the year ahead.

Meta and Microsoft will report on April 30. On May 1, traders will pivot to Amazon and Apple. Nvidia will conclude the season with its quarterly results on May 28.

Reuters contributed to this report.