Market commentary by eToro analyst for Romania, Bogdan Maioreanu: Only one of the Magnificent 7 stocks above water year to date

It was a busy week for four of the ”Magnificent 7” companies – the US technology giants – that had their earnings reports. Meta, Microsoft, Amazon and Apple presented their financial results for the first quarter of 2025. For one of them, the results were able to push in positive territory its stock performance from the beginning of the year. Coming into these earnings, investors had question marks over AI demand but also on the tariffs’ impact.

Microsoft quickly quashed those concerns, delivering a massive 35% sales growth in constant currency from Azure, well above expectations of 30% and showing how well they’re monetising AI. Total revenue in the fiscal third quarter jumped 13% to $70.1 billion, while adjusted profit was USD$3.46 a share. Capex in the quarter jumped to $21.4 billion, lower than last quarter – the first time drop quarter on quarter in two years – but capex for the full year remains unchanged. Importantly, Microsoft expects operating margins to lift slightly year-over-year despite its massive spending, which shows why Microsoft is a money-making machine.

Meta Platforms, owner of Facebook, WhatsApp and Instagram, also reported strong Q1 2025 results, with revenue rising 16% year-over-year to $42.3 billion, surpassing analyst expectations by 4%. Net income surged 35% to $16.6 billion ($6.43 EPS), driven by robust advertising revenue of $41.4 billion from its Family of Apps segment. But Meta also discovered that the metaverse is expensive, as its division reported a $4.2 billion operating loss. But the company raised its 2025 capital expenditure forecast to $64–72 billion (from $60–65 billion) to accelerate AI infrastructure, including data centers and next-gen hardware. CEO Mark Zuckerberg highlighted progress with Meta AI, now nearing 1 billion monthly users. Meta guided Q2 revenue of $42.5–45.5 billion, but analysts raised concerns about the U.S.-China tariff impacts on ad spending, particularly from Chinese e-commerce firms like Temu.

Amazon also reported strong results, with net sales rising 9% year-over-year to $155.7 billion and net income jumping to $17.1 billion. Its cloud Amazon Web Services revenue rose 17% to $29.3 billion (nearly matching the $29.4 billion consensus) while advertising revenue increased 19% to $13.92 billion. However, shares fell almost 4% post-market as investors reacted to cautious Q2 guidance that fell short of Wall Street forecasts, raising concerns about profitability amid new U.S. tariffs on Chinese goods. In fact Amazon mentioned that their guidance is subject to “substantial uncertainty”.

Apple shares also dropped over 2% post-market despite a Q2 2025 earnings beat, with revenue rising 5.1% to $95.36 billion and EPS of $1.65. iPhone sales outperformed at $46.84 billion, while Services revenue ($26.65B) narrowly missed estimates. China sales fell short at $16 billion, 2.3% lower than estimates, amid Huawei, Xiaomi, and Oppo competition, while the Chinese government banned foreign-made technology from some workplaces. Investors remain cautious due to looming U.S.-China tariff risks. Apple expects $900 million in higher costs from tariffs in the current period, if these remain unchanged, the company said. Revenue will increase by a percentage in the low-to-mid-single digits in the quarter. Analysts have estimated 5% on average.

Out of the ”Magnificent 7”, year to date, only Microsoft is showing a positive stock performance of +0.93%. The largest decrease in stock price from the beginning of the year is in Tesla (-31%), followed by Apple and Nvidia, both almost -16%, and Alphabet (Google) and Amazon, around -15%. Meta is close to the positive area with -2.27% All Magnificent 7 stocks are preferred by Romanian retail investors on the trading and investing platform eToro, with Nvidia, being the most held stock, followed by Tesla, Apple in 4th place, Microsoft in 5th, Amazon in 7th, Alphabet in 8th and Meta in 10th place at the end of Q1 2025.

Bogdan Maioreanu, eToro analyst and markets commentator, has over 20 years of experience in financial services and investments and a strong background in journalism. He held different Corporate Banking management positions in both Raiffeisen Bank and OTP Bank, before moving to business consultancy roles working for IBM Romania, among others. Bogdan is an Executive MBA from Asebuss and Washington University.

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02.05.2025 / Editor, Andreea Dragan

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