The unofficial start to big-cap US “tech” earnings came last week with reports from Netflix and Tesla. This week, Google, Microsoft and Meta mark the official beginning of mega-cap results.
2023’s US equity rally is, on some metrics, the narrowest in recorded history, which raises the stakes for the names playing Atlas to a stock surge that caught nearly everyone flat-footed in the first half. Post-earnings selloffs for Netflix and Tesla suggested the margin for error may be thin.
Together, the so-called “Magnificent 7” comprise 26% of S&P 500 market cap. In a testament to the severity of this year’s market concentration, their combined heft in the Nasdaq 100 forced a special rebalance.
Ahead of a crucial series of reports, I thought it’d be useful to present a trio of visuals which give you a sense of i) YTD performance and what it’s meant for market cap, ii) what’s expected in terms of top and bottom line growth as well as margins and iii) how far valuations have come.
YTD performance and market cap:
Q2 estimates:
Valuation:
