What S&P Earnings Would Be Without The Magnificent Seven

• The six largest tech-oriented companies (excluding Tesla) are expected to drive over 60% of S&P 500 earnings growth by growing earnings an average of 19% each, potentially more than doubling the growth rate of the 'S&P 493'
• Nvidia, Alphabet, and Microsoft are the top three contributors to the S&P 500's quarterly earnings increase, with Micron Technology as another major contributor outside the Magnificent Seven
• This week's Magnificent Seven earnings include Microsoft (up 21% expected), Apple (up 11%), Meta (up 2%), and Tesla (down 38%), with the group's massive scale maintaining their dominance despite slowing profit growth

Summary: S&P 500 Earnings Concentration in Magnificent Seven

The Magnificent Seven tech giants are driving the vast majority of S&P 500 earnings growth in Q4, highlighting significant market concentration. As a group, these companies are expected to report 20.3% earnings growth compared to just 4.1% for the remaining S&P 493 companies, according to FactSet's John Butters.

Key Figures:

• Overall S&P 500 Q4 earnings growth: 8.2%
• Technology sector accounts for approximately 80% of expected S&P 500 earnings growth
• The six largest tech-oriented companies (excluding Tesla) are projected to drive over 60% of total S&P 500 earnings growth with an average 19% increase each
• The "S&P 493" (excluding Magnificent Seven) grew earnings 11.8% in Q3, showing modest improvement

Companies Reporting This Week:

Four Magnificent Seven members report earnings this week: Tesla (Wednesday, EPS expected down 38%), Microsoft (Wednesday, up 21%), Meta Platforms (Wednesday, up 2%), and Apple (Thursday, up 11%).

Top Contributors:

Major contributors to S&P earnings include Nvidia, Alphabet, and Microsoft from the Magnificent Seven, plus Micron Technology with consensus estimates of $8.20 per share. Boeing also ranks as a top-5 contributor despite an expected 44-cent loss.

Market Implications:

LPL Research suggests the Magnificent Seven's growth rate may exceed 25% when final results are reported, more than doubling the S&P 493's growth rate. This concentration indicates continued market dependence on mega-cap tech stocks, with superior growth expected to persist for several quarters ahead.