Earnings Reports from Tesla and Alphabet to Launch Big Tech’s “Magnificent Seven” Season
Wall Street is gearing up for a crucial week as Tesla and Alphabet are set to announce their second-quarter earnings on Wednesday. This marks the beginning of the “Magnificent Seven” tech earnings season, unfolding amidst market volatility.
Tesla is under considerable strain as it approaches its Wednesday earnings call. Analysts predict an earnings per share of a mere 39 cents, a decrease from 52 cents a year ago. Revenue is also expected to dip to $22.1 billion from $25.5 billion. The electric vehicle manufacturer reported sales of 384,000 vehicles in Q2, indicating a 13.5% year-over-year decline in unit sales.
The company is battling several challenges, including the abolition of federal EV tax credits under Trump’s new legislation, postponed launches of lower-priced models, and potential losses from zero-emission vehicle credit revenue. Despite recent gains, Tesla shares have fallen 18% year-to-date, with options markets anticipating a 7% fluctuation post-earnings.
On the other hand, Alphabet seems to be in a stronger position, with analysts increasing price targets ahead of the Google parent’s Thursday report. The company is predicted to demonstrate robust performance from its YouTube and Google Cloud divisions. However, there are worries about a potential slump in the advertising market due to tariff-related economic uncertainty.
The “Magnificent Seven” group—comprising Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla—is expected to register 14.1% earnings growth, compared to a mere 3.4% for the remaining S&P 500 companies. With over 112 S&P 500 companies reporting this week, the results of these tech giants will likely shape the broader market sentiment.