Mag-7 Earnings: Trick or Treat for ETF Investors?

Most of the Magnificent Seven of “Mag 7” companies are now out with their earnings. Note that the Mag 7 group is the backbone of the S&P 500’s tech exposure.These stocks accounted for about one-fourth of all S&P 500 earnings.

Q3 earnings for the S&P 500 index would be up 6.1% from the same period last year if the Mag 7 group’s substantial earnings contribution is excluded (vs. +7.3% otherwise), per the Earnings Trends issued on Oct. 29, 2025.

For the Magnificent 7 group, Q3 earnings are expected to be up 11.5% from the same period last year on 15.4% higher revenues, which would follow the group’s 26.4% earnings growth on 15.5% revenue growth in the preceding period, per the Earnings Trends issued on Oct. 29, 2025.

Against this backdrop, let’s delve a little deeper into how the AI heroes of Wall Street have fared in this reporting season. Did their results spook you or treat you?

Inside the Earnings Results

Amazon AMZN surged over 12% pre-market on Oct. 31, 2025, after posting stronger-than-expected Q3 results, with both revenues and profits beating estimates. Its cloud unit outperformed forecasts, thanks to rising AI demand. CEO Andy Jassy said Amazon will “continue investing aggressively in capacity” to meet growing needs, echoing AI spending plans from Microsoft MSFT and Alphabet GOOGL, as quoted on Yahoo Finance.

Apple AAPL shares gained 1.9% pre-market on Oct. 31, 2025, as it reported fourth-quarter results that beat earnings and revenue estimates but came in just below expectations for iPhone sales and China revenues, as quoted on Yahoo Finance. CEO Tim Cook offered upbeat guidance, citing strong demand for iPhone 17.

CEO Cook expects China revenues to rebound in Q1 and said that the December quarter should deliver Apple’s “best-ever revenue” and record iPhone sales, as cited on Yahoo Finance. The results follow Apple’s market cap crossing $4 trillion, joining Microsoft MSFT and NVIDIA NVDA.

Microsoft delivered stronger-than-expected fiscal Q1 results, driven by a 40% surge in its Azure cloud business. Revenues and earnings grew year over year and topped estimates. Microsoft’s Intelligent Cloud segment, which includes Azure, saw sales rising 28% year over year and coming ahead of forecasts. Despite the strong performance, shares slipped nearly 3% on Oct. 30, 2025, after the company hinted at faster growth in capital expenditures this fiscal year, per Reuters.

Meta META slumped 11.3% on Oct. 30, marking its biggest one-day decline in three years. Both Q3 topline and bottom line beat estimates. Its revenues grew 26.2% year over year while GAAP earnings fell 82.6%. The company reported a $15.93 billion tax charge from the rollout of President Donald Trump’s One Big Beautiful Bill Act, as quoted on CNBC.

Meta forecast "notably larger" capital expenses next year, thanks to massive investments in artificial intelligence, per Reuters. The company now expects capex to range between $70 billion and $72 billion versus the prior guidance of $66 billion to $72 billion.

Alphabet GOOGL shares gained 2.5% on Oct. 30 as the company topped estimates on both lines. Revenues and earnings grew handsomely year over year. The company raised its 2025 capital spending to $91-93 billion to expand AI infrastructure. Google Cloud revenues surged 33.5% and beat the Zacks Consensus Estimate by 3.25%. Google’s AI app Gemini now has more than 650 million monthly active users, up from the 450 million active users it had last quarter, as quoted on CNBC. 

Tesla TSLA reported results on Oct. 22, 2025, after market close. Tesla’s earnings missed estimates, but revenues beat the same. Tesla reported a 12% increase in Q3 revenues while net income fell 37%. Shares fell 1.5% over the past week and 4.6% on Oct. 30, 2025.

NVIDIA NVDA is likely to report earnings on Nov. 19, 2025. It is now the only company that hit a $5-tillion market cap. NVIDIA is riding high on a deal spree. The recent rise is followed by major GTC announcements, including a U.S. Energy Department partnership to build seven supercomputers using up to 10,000 Blackwell GPUs. NVDA is partnering with Uber to produce 100,000 self-driving cars starting in 2027, and is also collaborating with Eli Lilly, Nokia, Cisco, T-Mobile, Amazon, Foxconn, and Caterpillar across AI, 6G and robotics.

Silver Linings

While Meta shares plunged meaningfully, Meta’s CEO Mark Zuckerberg defended the extravagant spending plans by saying that the company is already reaping returns in its core business and is “aggressively” preparing for superintelligence, as quoted on CNBC. In fact, most companies like Amazon, Alphabet and Microsoft joined the chorus of aggressive capital expenditures.

NVIDIA, too, has been leaving no stone unturned to make its AI story bigger. Big deals are flowing in for NVIDIA. These companies’ conviction in the AI boom, despite AI payoff worries, makes a good case for Mag-7 ETF investing.

One can thus bet on ETFs like Roundhill Magnificent Seven ETF MAGS, MicroSectors FANG+ ETN FNGS, Vanguard Mega Cap Growth ETF MGK and Invesco S&P 500 Top 50 ETF XLG. The pure-play Mag-7 ETF MAGS added 1.8% over the past week (despite the latest fall, i.e., 1.1% drop on Oct. 30), outperforming 0.5% gains in the S&P 500.

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

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