Introduction
The Seven Magnificent companies, comprising NVIDIA, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla, are expected to see a 12% increase in sales and a 37.4% rise in net income for Q3 2025 compared to the same period in 2024, according to Valmex Casa de Bolsa analysis.
The Driving Force Behind Their Success
This robust performance is attributed to these companies’ leadership in artificial intelligence (AI) development and adoption, as well as the integration of this technology by large corporations into their production and operational processes.
Approximately a quarter of large US companies are expected to incorporate AI into their processes by year-end, driving capital expenditure for the Seven Magnificent companies to over $100 billion per quarter, as stated by Valmex analysts.
This unprecedented spending not only fuels innovation but also strengthens their dominant market position in data and digital services. The group’s average profit margins could reach 31.9%, a 2.76% increase from 2024, demonstrating that AI-driven efficiency continues to bolster their results.
Market Capitalization and Stock Performance
The combined market capitalization of the Seven Magnificent companies stands at $20.81 trillion, representing nearly a third of the S&P 500.
Year-to-date, most companies in this group have experienced double-digit increases in stock prices. NVIDIA leads with a 34.90% rise, surpassing the $4 trillion market cap threshold and remaining the most valuable company.
Alphabet (Google) follows with a 32.31% gain, Meta (parent company of Facebook and Instagram) with a 25.24% increase, and Microsoft with a 22.81% rise.
Company-by-Company Analysis
NVIDIA: Expected to grow by around 51% compared to 2024, driven by strong global demand for AI chips, particularly the new Blackwell architecture and Hopper chip. Its data center segment, accounting for nearly 88% of revenues, is expected to maintain its upward trend despite Chinese market weakness.
Microsoft: Maintains steady growth, with expected income increases between 14% and 16% for the quarter. Its Intelligent Cloud division, including Azure, remains the primary growth driver, while its productivity ecosystem (Office, Copilot, and Teams) continues expanding user bases. The company has successfully opened over 400 data centers in 70 global regions, though demand still outpaces supply.
Apple: Anticipated to lead in earnings growth, with an 81.2% increase over the previous year. However, after adjusting for accounting effects in Ireland, organic growth stands at 6.9%, the second-lowest in the group behind Tesla. Nonetheless, Apple’s strength lies in its services division, now accounting for nearly a third of total revenues, driven by cloud and iCloud subscription services.
Amazon: Demonstrates strength in its digital advertising division (Amazon Ads), which grew over 20% in the previous quarter, thanks to its extensive platform network. However, analysts note some lag in AWS (Amazon Web Services), its cloud services business, compared to competitors like Microsoft and Google Cloud, as well as potential pressure from global tariffs and rising logistics costs.
Meta (Facebook’s parent company): Projected income growth between 17% and 24%, backed by the effectiveness of its AI-driven ad recommendation models. Video viewing time on Instagram increased over 20% year-over-year, and the Reality Labs segment begins to recover with rising sales of augmented reality devices.
Alphabet (Google): Experiences a mixed outlook. Despite a slight total revenue contraction due to a high comparative base, its cloud division and Gemini platform continue expanding. Google Cloud’s backlog exceeds $106 billion, and the company has decided to raise its annual investment guidance to $85 billion, reflecting growing AI infrastructure demand.
Tesla: Anticipates a 28.7% decline in net income, affected by narrower margins and fierce competition in the electric vehicle market, particularly in China. However, analysts don’t rule out a positive surprise if Tesla stabilizes production volumes and improves profitability by year-end.
Reporting Season Overview
The reporting season kicks off on October 22 with Tesla, followed by Alphabet, Meta, and Microsoft on October 29, Apple on October 30, Amazon on October 31, and NVIDIA on November 19.
Key Questions and Answers
- What is driving the Seven Magnificent companies’ success? Their leadership in AI development and adoption, as well as the integration of this technology by large corporations into their production and operational processes.
- What are the expected sales and net income increases for Q3 2025? A 12% increase in sales and a 37.4% rise in net income compared to the same period in 2024.
- How much capital expenditure do these companies anticipate? Over $100 billion per quarter, driven by AI incorporation in large corporations.
- What are the projected profit margins for the group? An average of 31.9%, a 2.76% increase from 2024.
- What is the combined market capitalization of these companies? $20.81 trillion, representing nearly a third of the S&P 500.
- Which companies have experienced the most significant stock price increases? NVIDIA leads with a 34.90% rise, followed by Alphabet (32.31%), Meta (25.24%), and Microsoft (22.81%).
- What are the projected growth rates for each company? NVIDIA: 51%, Microsoft: 14-16%, Apple: 6.9%, Amazon: not specified, Meta: 17-24%, Alphabet: mixed outlook, Tesla: -28.7%.
