Five Mag7 Stocks Reporting Could Shake Up Nasdaq

Stocks have underperformed this year, with the "Magnificent 7" in the red amid geopolitical tensions and a more hawkish Fed outlook. Traders might be hoping that earnings will help propel Big Tech higher and support the Nasdaq.

Key Developments in Big Tech

• Between Wednesday and Thursday, Alphabet, Meta, Microsoft, Tesla, and Apple will report their earnings for the last quarter.
• AI is likely to be the main theme after TSMC and Intel reported continued chip demand from top spenders in this segment, such as Alphabet, Meta, and Microsoft.
• Dwindling automotive sales might be the pain point for Tesla, while higher memory costs could affect Apple's outlook.

Nasdaq Struggling to Make Headway

It was a wild week for equities, but in the end, the tech-heavy Nasdaq closed slightly lower (-0.1%) after five days of trading, marking the second consecutive week of losses. Concerns that Trump's attempt to acquire Greenland will affect geopolitics drove the market. But at the same time, better-than-anticipated US economic data left traders concerned that the Fed won't cut rates again until late in Q2, which weighed on stocks with high valuations. The so-called "Magnificent 7" tech stocks that have been instrumental in the AI boom over the last couple of years rallied in the latter part of last week but were unable to recover from prior losses and haven't broken into the green for the year yet. Now that the Greenland issue has cooled, traders can focus on upcoming earnings. Recent TSMC and Intel earnings suggested that demand for AI infrastructure remains solid, with tech earnings likely to focus on their 2026 growth projections.

Highlights of Upcoming Mag 7 Earnings

Google parent Alphabet's earnings are scheduled for Wednesday after the market close, with analysts expecting earnings of $2.64, up from $2.15 last year, while revenues rose 15.5% to $111.4 billion. As usual, the focus will be on the company's cloud division, which has been driving revenue. But after the strong performance of the Gemini update in November, traders might be looking closer at the company's AI offering.

Meta is scheduled to report Q4 earnings after the close on Wednesday, with EPS projected to rise to $8.21 from $8.02 a year ago. Revenue is expected to rise 21% to $58.4 billion, amid strong ad spending. Markets, however, will be keen to see what the company has to say about the billions it is spending on AI and how much CEO Mark Zuckerberg plans to spend in 2026.

Microsoft's fiscal Q2 earnings are scheduled for Wednesday after the market closes, and analysts are projecting EPS of $3.85, up from $3.23 in the same quarter last year. Revenue is anticipated to rise 15.3% to $80.3 billion, with the bulk once again coming from Azure. Traders will likely be interested in comments on Copilot adoption and the company's cloud revenue forecasts.

Tesla is also anticipated to update investors after the market closes on Wednesday, with earnings anticipated to fall to $0.45 from $0.73 last year. Meanwhile, sales are forecast to decline by 4.8% to $24.8 billion. The focus will likely be on the company's non-car divisions after vehicle deliveries fell for the second year in a row, and the company disappointed on the earnings front over the last four reports.

Apple will report its fiscal Q1 earnings on Thursday after the market closes, with the median EPS forecast at $2.67, up from $2.40 a year ago. Revenue is expected to increase by 11.4% to $138.5 billion. The company's update on iPhone sales forecasts is likely to be the focus, but traders could also be keeping an eye out for any update on costs due to the rise in memory prices.

Nasdaq Breakout Pending?

Nasdaq’s narrowing price action to the upside, with higher lows at 24880 and 24650, suggests a complete triangle pattern that could be pending a breakout. The double-top formation at 25860 is the first line of resistance for bulls, aligning with the upper VWAP, with the prior record peak at 26250 next up. Typical extensions measure the opening of the triangle, bringing into focus 27900 in the longer term.

Source: SpreadEx | US Tech, Daily Chart