You can learn a lot by watching who the market stops caring about.
A year ago, if you whispered the words “Magnificent Seven,” Wall Street would perk up. These were the darlings of the market. The stocks everyone assumed were untouchable.
But the market has a short memory and even less patience. Miss a step, and it moves on fast.
Just ask Tesla Inc. (TSLA), Apple Inc. (AAPL) or any other once “magnificent” name that’s suddenly struggling to keep up with the new leader of the pack: NVIDIA Corporation (NVDA).
If you ask me, there’s no Magnificent Seven anymore. There’s just the Magnificent One. NVIDIA is the engine behind AI. The company fueling trillion-dollar transformations across tech, energy, defense… You name it.
The rest? They’re either trying to play catch-up or hoping their legacy businesses don’t drag them down.
Last week, we started to see the gap widen. Alphabet, Inc. (GOOGL) put up a strong quarter with its cloud and AI momentum intact. But Tesla looked shaky. Flat growth, shrinking margins and warning signs for the quarters ahead. (We discussed both earnings reports in last Saturday’s Market 360.)
Now, we enter the next phase of the test for Big Tech: earnings from Microsoft Corporation (MSFT), Meta Platforms Inc. (META), Amazon.com Inc. (AMZN) and Apple.
These four names may still command headlines, but the real test is whether they still deserve a place in your portfolio – especially with NVIDIA leaving them in the dust.
So, in today’s Market 360, let’s break down what these four tech giants just reported and what it all means for your portfolio…
Meta Platforms
After Wednesday’s market close, Meta Platforms announced a better-than-expected third quarter.
Earnings climbed 38% to $7.14 per share while revenue rose 22% to $47.52 billion. Analysts expected $5.90 earnings per share on $44.84 billion in revenue, so profits came in 21% higher, and sales beat forecasts by about 6%.
A big part of the boost came from ads. Meta’s ad impressions – how often people saw ads on Facebook, Instagram, and other platforms – rose 11% from a year ago. And the average price per ad went up 9%. Additionally, more users are also logging on. Daily active people rose 6% to 3.48 billion.
Now, this report comes on the heels of CEO Mark Zuckerberg making a series of high-profile personnel moves in an effort to boost the company’s AI efforts. The quarter also included the rollout of the company’s new, upgraded smart glasses. Zuckerberg and Co. have made it clear that they think this is where the future of computing lies – in a world where we move beyond the smartphone and into AI and augmented reality.
Looking ahead, Meta issued guidance for revenue between $47.5 billion and $50.5 billion in its third quarter, well ahead of Wall Street’s estimates for $46.2 billion.
Microsoft
On Wednesday, Microsoft said its revenue hit $76.4 billion in its fourth quarter – up 18% from last year and ahead of the $73.89 billion analysts expected. Earnings came in at $3.65 per share, beating the $3.37 that Wall Street was looking for. That’s a 24% jump from a year ago.
Per usual, the cloud business was the star of the show. Its Intelligent Cloud revenue totaled $29.9 billion. Within that, server products and cloud services revenue increased 27%. And Azure Cloud – Microsoft’s cloud platform – did even better, climbing 39%.
This wasn’t the only highlight for Microsoft this quarter, however…
As you may recall, Microsoft has been placing some big bets on AI. In fact, earlier this year, CEO Satya Nadella said the company plans to invest $80 billion in data centers during fiscal 2025. Well, it’s clear that’s starting to pay off, as the company noted that AI was also a driving force for the business this quarter.
Microsoft noted that its AI business annual revenue surpassed $13 billion, up 175% year-over-year. Additionally, Microsoft also disclosed Azure’s revenue in dollars for the first time ever and said sales from Azure and other cloud services exceeded $75 billion in fiscal year 2025. That’s up 34% from the prior year.
Clearly, MSFT is monetizing its AI projects.
I should also note that Microsoft’s rally in the wake of this news led to it joining the $4 trillion market cap club alongside NVIDIA.
Looking at Microsoft’s year as a whole, the company reported revenue of $281.7 billion, up 15% from the year prior. Meanwhile, earnings per share jumped 16% year-over-year to $13.64.
Amazon.com
On Thursday, after the bell, Amazon reported results that beat but provided weak guidance that hit the stock.
Earnings increased 33% year-over-year to $1.68 per share. Analysts were expecting $1.33 per share. Revenue rose 13% to $167.7 billion, topping estimates for $162.09 billion.
Digging a little deeper, Amazon’s advertising revenue grew 23% year-over-year to $15.69 billion, beating estimates for $14.99 billion.
Amazon’s cloud computing unit, Amazon Web Services (AWS), seemed to have a solid quarter. This closely watched (and highly profitable) segment brought in $30.9 billion in revenue, a growth of nearly 18%, and just beat expectations of $30.8 billion.
Unfortunately, when it came to its guidance, the company didn’t deliver. Amazon expects operating income of $15.5 billion and $20.5 billion for the third quarter. Wall Street was looking for $19.5 billion.
I should also mention that this weak guidance raises questions about Amazon’s AI plans. As you may recall, the company has committed to spending up to $100 billion this year on AI. So, investors are eager to see this hefty investment payoff… and it looks like they will have to continue waiting.
Apple
Apple announced earnings of $1.57 per share in its third quarter of fiscal year 2025. That’s up 12% from a year ago and ahead of analyst estimates for $1.43. Revenue came in at $94.04 billion, up 10% and beating analysts’ expectations for $89.53 billion. It also marked Apple’s biggest quarterly revenue growth since December 2021.
Digging a little deeper, iPhone sales rose about 13% year-over-year to $44.58 billion, topping forecasts. Mac and iPad sales also both beat estimates, bringing in $8.05 billion and $6.58 billion, respectively.
Meanwhile, Apple’s Services business, which has been an important growth component for the company, continues to soar. It brought in $27.42 billion in revenue, up 13% year-over-year and above expectations for $26.8 billion.
Turning to AI, we know that Apple’s June Worldwide Developers Conference (WWDC) was underwhelming when it came to AI announcements (I covered the event in a previous Market 360.) So, investors were looking for any information they could get during this earnings call.
CEO Tim Cook noted that Apple is significantly growing their investment but was cagey about commenting on any AI features currently in the works.
What Stock Grader Says…
Now, following these earnings, Meta and Microsoft opened nearly 13% and 8% higher, respectively, on Thursday. Meanwhile, on Friday morning, Amazon opened 7% lower, while Apple was up slightly.
Overall, it was a mixed bag for these Big Tech companies. But one thing is clear from these reports… The AI Boom is still on. And I don’t see it slowing down anytime soon.
So, the big question is, are any of these four stocks good buys right now? Let’s take a look at what my stock grading system has to say…
Amazon, Meta and Microsoft receive a B-rating, which makes them Buys. However, Apple earns a C-rating, which makes it a Hold. As you can see from the report card above, it has a weak rating for its Quantitative Grade, which tells us that institutional buying pressure is dwindling.
In other words, my system is telling us that Amazon, Meta and Microsoft are worth considering, while investors should be cautious about Apple.
Set Up Your Portfolio for Success
Now, when it comes to adding stocks to your portfolio, I encourage you to focus on fundamentally superior stocks. That means companies with growing sales and earnings.
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My Growth Investor stocks are backed by 22.8% average annual sales growth and 87.6% average annual earnings growth. Not to mention that the average Growth Investor stock has also had its earnings estimates revised 6.5% higher in the past three months, so the analyst community remains very positive on our stocks.
In other words, those who follow my Growth Investor stocks can invest confidently. Backed by my powerful stock grading system, these are the stocks that exhibit tremendous relative strength and begin to rebound quicker than most.
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(Already a Growth Investor subscriber? Click here to log in to the members-only website.)
Sincerely,
Louis Navellier
Editor, Market 360
P.S. My InvestorPlace colleague Eric Fry recently made a bold claim, saying that investors need to sell several ticking time bombs in their portfolio before it’s too late.
Among those names? Tesla and Amazon (plus a few more that may surprise you).
Now, I don’t always agree with Eric. But I always listen to what he has to say. And with 40+ stocks in his track record that have gone on to soar more than 1,000%, you can’t afford not to, either…
So, instead of owning these ticking time bombs, Eric is offering three under-the-radar stocks with much higher profit potential. And he gives away the names and tickers of each of them for free in his new “Sell This, Buy That” broadcast. Click here to watch it now.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
NVIDIA Corporation (NVDA)
