Ahead Of The Mag 7 Deluge: Previewing MSFT, GOOGL And META Earnings

After the close a batch of Mag 7 heavyweights - META ($1.9T mkt cap); MSFT ($4T mkt cap) and  GOOGL ($3.2T mkt cap) - collectively representing nearly $10 trillion in market cap will report earnings, and what they announce, especially when it comes to their capex plans, could sway the market even more than today's Fed decision (whose outcome is now largely priced in). 

The Mag 7 universe remains in a world of its own: the 7 AI-heavy companies, which account for a third of the S&P's market cap, are expected to report YoY earnings growth of 14.9% in Q3 vs. 6.7% for SPX 493 and 8.5% for SPX. Which explains why they attract so much attention. As JPM's Michael Cemabelest calculated, "AI related stocks have accounted for 75% of S&P 500 returns, 80% of earnings growth and 90% of capital spending growth since ChatGPT launched in November 2022."