2 Mag 7 Earnings This Week: Alphabet and Tesla

This is an important week for earnings as Wall Street is moving beyond the banks to every other industry. The first two Magnificent 7 stocks are reporting this week in Alphabet and Tesla.

But in addition to those two large cap stocks, there are dozens of other S&P 500 large cap companies who will also be reporting.

But all eyes will be on Alphabet and Tesla. It is a tale of two different paths for these two mega-cap companies.

Alphabet Versus Tesla: Who is the Bigger Earnings Winner?

Alphabet has a solid earnings surprise track record, having beaten 9 consecutive quarters. However, Tesla has missed on earnings two quarters in a row.

Alphabet is one of the cheapest of the Mag 7 stocks, but Tesla is one of the most expensive on a price-to-earnings (P/E) basis. Earnings are going in different directions for the two companies as well.

Will Alphabet and Tesla earnings be market movers this week?

2 Magnificent 7 Stocks to Watch This Week: Alphabet and Tesla

1. Alphabet Inc. (GOOGL)

Alphabet owns YouTube and has an AI product in Google AI and Gemini. It has only missed on earnings 4 times in the last 5 years. Alphabet has now put together a nice earnings surprise streak, of 9 beats in a row.

Alphabet shares have lagged the S&P 500. It’s up just 0.4% year-to-date and over the last year is up just 7%. Alphabet trades with a forward P/E of just 19.4, which is below the 21.7x of the S&P 500.

Alphabet’s earnings are expected to rise another 18.8% this year after jumping 38.6% last year.

Will Alphabet beat again and put to rest some of the fears about AI?

2. Tesla, Inc. (TSLA)

Investors and traders of Tesla have never cared if the company beat on earnings. It has missed two quarters in a row, but Tesla still trades with a forward P/E of 186. A P/E over 20 is considered expensive.

While shares of Tesla are down 19% year-to-date, they are off recent lows and are still up 37.3% over the last year. Earnings are expected to fall 27% this year after falling 22.4% last year.

Will the Street brush off Tesla’s weak earnings in favor of the future with autonomous cars, robotaxis and robots?

[In full disclosure, Tracey owns shares of GOOGL in her personal portfolio.]

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research