Mag 7 Outlook: What Apple, Microsoft, Meta, and Tesla Just Told Us

The flight to safety that defined the final quarter of 2025 and persisted into January saw some relief over the past week as the market looked forward to the Magnificent Seven reporting earnings. 

Investors—hopeful for a rebound after a year in which just two of the Mag 7 outperformed the S&P 500—were looking for any indication that last year’s elevated AI spending would start to bear fruit in the form of notable earnings growth.  

Those two—Alphabet (NASDAQ: GOOGL) and NVIDIA (NASDAQ: NVDA)—do not report until Feb. 4 and Feb. 25, respectively. But the cohort got underway on Wednesday, Jan. 28, with Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), and Tesla (NASDAQ: TSLA) reporting, and Apple (NASDAQ: AAPL) following on Thursday. Amazon (NASDAQ: AMZN) reports Feb. 5.

And while the results have been mixed, the mega-cap giants of the tech and communication services sectors have provided plenty of clues about what shareholders can expect in the year ahead. 

Microsoft Careens After Tempered Azure Guidance

Shares of the Bill Gates- and Paul Allen-founded firm fell off a cliff on Wednesday, sliding nearly 9% in after-hours trading amid tempered top-line expectations for their cloud computing business segment, Azure. 

Microsoft, the first of the group to report, beat on earnings and revenue when the company announced its Q2 fiscal year 2026 (FY2026) financials. EPS of $4.14 surpassed expectations of $3.86, while revenue of $81.27 surpassed expectations of $80.28 billion. 

During the company’s earnings call, CEO Satya Nadella said, “Microsoft Cloud surpassed $50 billion in revenue for the first time, up 26% year-over-year.” Azure in particular saw quarterly growth of nearly 40%, but the company is forecasting that figure to fall between 37% and 38% in Q3. 

Investors reacted negatively to that, despite guidance representing just a 2% to 3% reduction from Q2. More importantly, concerns about ongoing spending also soured sentiment. Microsoft’s AI ambitions led to $37.5 billion in capital expenditure (CapEx) in Q2, with Wednesday’s sell-off underscoring ongoing investor worries about the return on investment. 

Still, analysts remain bullish, with 39 of the 42 who cover MSFT assigning it a Buy rating. The stock’s average 12-month price target $599.72 suggests potential upside of more than 38%.  

Investors Approve of Meta Increasing CapEx 

Shares of META jumped more than 10% after the company reported Q4 FY2025 EPS of $8.88 and revenue of $59.85 billion—both of which blew past analysts’ expectations. 

Like Microsoft, the company announced that its AI CapEx would be increasing in 2026. For Meta, that spending is forecast to fall between $115 billion and $135 billion, up from the more than $72 billion it spent in 2025. 

But unlike Microsoft, the market reacted positively, demonstrating the unpredictability of short-term performances during earnings season. 

One reason for that positive reception was guidance. The company says it expects Q1 FY2026 revenue to land in the range of $53.5 billion to $56.5 billion, alleviating concerns about its elevated CapEx.  

An average 12-month price target of $847.46 suggests early 15% potential upside, with 45 of 52 analysts covering META assigning the stock a Buy rating.

Tesla Is Shifting Its Focus From EVs to Robots

Tesla fell more than 7% in after-hours trading on Wednesday, Jan. 28, after the company reported its first-ever annual revenue decline. But shares rebounded in the wake of an announcement that the EV maker will cease production of its Model S and Model X in favor of focusing on robotics. 

Tesla plans to convert its Fremont, California, factory lines to produce Optimus robots, leading inventors to speculate about the company’s future in the EV market.  

The Elon Musk-led firm reported Q4 FY2025 EPS of 50 cents versus the 48 cents expected by analysts, and revenue of $24.90 billion versus the $24.75 billion expected by analysts. 

But the big story—other than a shifting focus to its robotics business—is that annual revenue declined 3% year-over-year (YOY), driven by a 39% increase in Q4 operating costs alongside lost market share domestically and abroad, resulting in just 1.636 million deliveries, or nearly 9% fewer than in 2024. 

The stock’s forward P/E has improved, but at 163.65, it still raises a red flag. Just 17 of 39 analysts covering TSLA assign it a Buy rating, and it is the only Magnificent Seven company that reported this week to have an average 12-month price target that implies potential downside. 

Apple Reports Record EPS and Revenue 

Apple, which announced Q1 FY2026 financials after the close on Thursday, Jan. 29, reported EPS of $2.84, which beat analysts’ estimates of $2.65, and quarterly revenue of $143.76 billion, which beat estimates of $138.25 billion. 

Shares chopped around in after-hours trading, but remained up on the news of record quarterly revenue, which was up 16% YOY, and record EPS, which was up 19% YOY. 

CEO Tim Cook highlighted specifically strong growth in Asia, noting that the company “continued to gain momentum in emerging markets, which includes India, where we saw strong double-digit revenue growth. Greater China also grew 38% year-over-year, driven by iPhone, which had record upgraders and double-digit growth on switchers.”

Analysts aren’t as bullish on Apple as they are on Microsoft and Meta, but 21 of 33 analysts covering AAPL assign it a Buy rating. At $282.80, the stock’s average 12-month price target implies more than 9% potential upside.

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