Good Omen, or Bad? Tesla Opens Mag 7 Earnings Season to Mixed Reviews
The all-powerful cohort continues to define the broader market, which has officially been placed on the “bubble watchlist.”

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We love all of our earnings seasons, but this one has been special.
Now, the quarterly reporting calendar has advanced to the slots reserved for the Magnificent Seven, with Tesla sharing its performance on Wednesday, while its six peers are scheduled to follow next week. The powerful cohort continues to define the broader market, which has officially been placed on the “bubble watchlist” as the current bull run gallops into its fourth year. Will it continue to go wherever the Mag 7 leads it?
Touching the Sun
The companies in the elite group — Tesla, Microsoft, Meta, Alphabet, Amazon, Apple and Nvidia — account for just over one-third of the total market capitalization of the S&P 500. The Roundhill Magnificent Seven ETF that tracks them, meanwhile, has risen roughly 35% in the past year, while the broader S&P 500 has increased by about 15%. The group is expected to continue to trounce its broader market peers in this quarter’s earnings season. According to analysts surveyed by FactSet, the Mag 7 is likely to post collective earnings growth of 15% in the third quarter, more than double the 6.7% growth of “The Other 493.”
Still, the chasm is narrower than in recent quarters, and analysts suspect that by this time next year, the bottom 493 companies will be largely driving market gains. After all, how much bigger can a $4 trillion company get? Already, some big bellwether names within the lowly “Other 493” are reporting tailwinds:
- On the consumer side, Coca-Cola beat Wall Street’s expectations earlier this week, while General Motors raised its operating forecast for the rest of the year on Tuesday, citing robust demand. That comes after major banks reported bumper profits last week, and as major industrial firms like 3M and GE Aerospace post strong earnings as well.
- So far, 76% of S&P 500 companies have beaten earnings-per-share projections, BofA Global Research analysts told MarketWatch on Tuesday, besting a 68% historical average. The strong performances may continue through next year: FactSet data projects that the Bottom 493 will reach similar earnings growth by the third quarter of 2026, while the Mag 7 remains level.
Open Road: Tesla revved its engine after the bell on Wednesday with an unsurprising revenue beat, as US consumers rushed to buy electric vehicles before the September 30 expiration of the $7,500 federal government EV tax credit. However, the company’s profit per share of just 50 cents fell below consensus expectations of 55 cents, dragging Tesla shares down 2% in after-hours trading. Of the Mag 7, only Nvidia, the largest company in the world and the No. 1 beneficiary of Big Tech’s historic AI spending, is expected to be a top five contributor to S&P 500 earnings growth in the third quarter, according to FactSet research. The Magnificent One doesn’t have the same ring.