Zacks Earnings Trends Highlights: Meta Platforms, Tesla, Nvidia, Alphabet and Microsoft

For Immediate Release

Chicago, IL – April 3, 2025– Zacks Director of Research Sheraz Mian says, "Total 2025 Q1 earnings for the S&P 500 index are expected to be up +5.9% from the same period last year on +3.9% higher revenues."

Looking Ahead to Q1 Earnings Season

Note: The following is an excerpt from this week's Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Here are the key points:

• Total 2025 Q1 earnings for the S&P 500 index are expected to be up +5.9% from the same period last year on +3.9% higher revenues, which would follow the +14.1% earnings growth on +5.7% revenue growth in the preceding period.
• Q1 earnings estimates have steadily come down since the quarter got underway, with the current +5.9% expected growth pace down from +10.4% at the start of January 2025.
• Looking at the calendar year picture, total S&P 500 earnings are expected to grow by +9.6% in 2025, with 12 of the 16 Zacks sectors expected to produce positive earnings growth. Sectors with double-digit earnings growth this year include Aerospace (+53.3%), Consumer Discretionary (+19.4%), Medical (+17.2%), and Tech (+12.1%).
• For the Mag 7 group, total 2025 earnings are expected to increase by +12.6% on +9.3% higher revenues. Excluding the Mag 7 contribution, total earnings for the remaining S&P 500 companies are expected to grow +8.7% in 2025, which compares to +4.0% growth in 2024 and -5.1% in 2023.

The Magnificent 7 Stocks Lose Their Leadership

The Magnificent 7 stocks have lost ground lately, with the DeepSeek breakthrough putting a spotlight on the group's ever-rising capital outlays that many in the market were already uncomfortable with.

Meta Platforms META is the only member of the group close to positive territory in 2025, outperforming the S&P 500 index (down -4.4%), while Tesla TSLA is at the bottom, having lost roughly a third of its value.

The rest of the group falls somewhere in the middle of the Meta and Tesla extremes, with Nvidia NVDA and Alphabet GOOGL positioned toward the bottom of the list, while Microsoft MSFT, Amazon and Apple are located in the top half.

With respect to Tesla's underperformance, it is tempting to blame Elon Musk's political activities for becoming a headwind for the stock. But there is no shortage of fundamental issues related to the company's China exposure, trade/tariff vulnerabilities, and the evolving EV competitive landscape that has to also be at play here. Apple is another member of the group that has significant exposure to both China and the trade and tariff issues.

Beyond Tesla and Apple, the outlook for the remaining five members of the group is closely tied to the overall sentiment on the artificial intelligence theme. All stocks related to this broad AI theme have been under a cloud lately, but these AI leaders are particularly vulnerable to this development given their heavy spending on the effort.

The Magnificent 7 Earnings Outlook

One key aspect of the Mag 7 group's earlier market leadership was its enormous earnings power and strong growth profile. The earnings outlook for the group was consistently positive last year, with analysts steadily raising their estimates.

Our analysis of evolving earnings estimates for the group indicates that the outlook is significantly less positive than it had been in the recent past.

For 2025 Q1, the expectation is that Mag 7 earnings will increase +13.1% on +11.7% higher revenues. This would follow the group's +31.0% earnings growth on +12.8% revenue growth in the preceding period.

For calendar year 2025, the expectation is that Mag 7 earnings will increase +12.6% on +9.3% higher revenues. This would follow the group's +40.4% earnings growth on +16.8% revenue growth in 2024.

In the aggregate, the Mag 7 group is expected to bring in $555.7 billion in earnings, up from the 2024 aggregate total of $493.7 billion.

The levelling out of the revisions trend in the above chart reflects how estimates for Tesla, Apple, and Meta have been unfolding in recent days, with the outlook for the rest of the group still very much positive.

Tech Sector Remains a Growth Driver

The Tech sector has been a significant growth driver in recent quarters, and we saw the same trend at play in 2024 Q4. For Q1, Tech sector earnings are expected to be up +12.6% from the same period last year on +10.6% higher revenues, the 7^th quarter in a row of double-digit earnings growth.

This would follow the sector's +26.2% earnings growth on +11.3% higher revenues in 2024 Q4.

The Tech sector has also been among the few sectors that have steadily enjoyed an improving earnings outlook, with estimates increasing steadily over the past year. However, the more recent data on this count shows a shift in the revisions trend, with estimates for Q1 modestly under pressure since January, though they remain positive for the full year of 2025.

The Earnings Big Picture

Total S&P 500 earnings for the current period (2025 Q1) are currently expected to be up +5.9% from the same period last year on +3.7% higher revenues.

Estimates for the period have been coming down since the quarter got underway.

The revisions trend is broad-based, with estimates for 14 of the 16 sectors down since the start of January (Medical and Construction are the only sectors whose estimates have increased). Sectors suffering the most significant cuts to estimates include Conglomerates, Aerospace, Construction, Basic Materials, Autos, and others. Unlike other recent periods, estimates for the Tech sector have also been under pressure.

The expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.

We should keep in mind, however, that these expectations will most likely be adjusted downward as the effects of slowing U.S. economic growth and tariffs begin to be reflected in diminished corporate profitability.

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Follow us on Twitter:  https://twitter.com/zacksresearch

Join us on Facebook:  https://www.facebook.com/ZacksInvestmentResearch/

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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