Earnings season is rolling on and the Magnificent Seven stocks (minus Nvidia Corp. (NVDA), which reported earnings a few weeks ago) are in the spotlight. So, who has the best chart among the Mag 7 stocks soon to report earnings? It’s a close call, explains Tracey Ryniec, senior stock strategist at Zacks Investment Research.
Some are calling the Mag 7 stocks “defensive plays.” But are they? None are classic value stocks with low price-to-earnings (P/E) or price-to-sales (P/S) ratios. But all of them are trillion-dollar companies that have become a staple of modern life.
Two of the six have great earnings surprise track records and are earnings all-stars, with just one miss in the last five years. It’s not easy, even for a Mag 7 stock, to beat nearly every quarter for five years. If it’s not the pandemic, it’s the emergence of new technologies like the Artificial Intelligence (AI) revolution that can trip up even the best companies.
But Microsoft Corp. (MSFT) is an earnings all-star. It has only missed one time in the last five years, and it was in 2022. That’s impressive.
Microsoft is expected to grow earnings by 12.9% this fiscal year and another 16.1% next year. However, its P/S ratio is still stretched at 13.5. Shares of Microsoft were recently up 23.5% year-to-date. Is Microsoft the top chart out of the Mag 7 stocks?
