The earnings focus this week is on the Magnificent 7 group of mega-cap Tech companies, with Amazon AMZN, Alphabet GOOGL, Microsoft MSFT, and Meta META reporting results on Wednesday, April 29th, and Apple AAPL doing the same the day after.
Alphabet has truly outperformed among these five Mag 7 players, with the stock roughly doubling over the past year. Alphabet shares have led this group in the year-to-date period as well, as the chart below shows.
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Alphabet is expected to have earned $2.64 per share on $92.2 billion in revenues, representing year-over-year changes of -6.1% and +20.6%, respectively. Estimates have largely been stable in recent weeks. But the stock’s impressive momentum heading into this report suggests that market participants will be looking for the continuation of the strong operating performance that has been on display in recent quarters, particularly with respect to growth in cloud, search, and margins.
Alphabet’s cloud revenue growth in the preceding period (2025 Q4) at +48% represented an acceleration from the 2025 Q3 period’s +34% growth. We expect the 2026 Q1 cloud revenue growth pace to accelerate further and for management to guide for continued momentum into Q2, if not beyond. The company had shown a modestly accelerating growth trend on the search front in the preceding two periods (+17% & +16% in 2025 Q4 and Q3, respectively), and 2026 Q1 will likely be in the +17% to +18% range.
Alphabet recently reiterated plans to spend $175 billion to $185 billion in capex this year, so the number is unlikely to change in this release. But we will likely hear more about how this heavy AI spend is being monetized. It was recently reported that roughly 75% of programming at Google is currently AI-generated and then reviewed and approved by engineers, up from 25% last year.
Microsoft has emerged as the Mag 7 group’s true laggard, with the stock getting rerated if the company can show more momentum in the Azure business. Revenue growth in Microsoft’s cloud business appeared to have stalled in recent quarters, with growth rates of +26%, +26%, and +27% in the preceding three periods, respectively. Management had flagged capacity constraints as the primary reason for the seemingly stalled growth trend, but there is lingering skepticism in the market about that issue. The expectation is that Microsoft brings in $4.07 per share in earnings on $81.4 billion in revenues, representing year-over-year changes of +17.6% and +16.2%, respectively.
For the Mag 7 group as a whole, total Q1 earnings are expected to increase by +20.3% on +22% higher revenues. The chart below shows current earnings and revenue growth expectations for the Mag 7 group relative to what the group achieved in the preceding period and what is currently expected in the coming three quarters.
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The chart below shows current expectations for the Mag 7 group on an annual basis.
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The Earnings Big Picture
Looking at 2026 Q1 as a whole, combining the actual results from 138 S&P 500 members that have reported already through Friday, April 24th, with estimates for the still-to-come companies, total earnings are expected to increase by +14.5% from the same period last year on +9.7% higher revenues.
The chart below shows current 2026 Q1 earnings and revenue growth expectations in the context of where growth has been in the preceding five quarters and what is expected in the coming four quarters.
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Regular readers of our earnings commentary are familiar with the steadily improving earnings outlook we have consistently highlighted over the past year. This improvement in the earnings outlook has been driven mostly by the Tech sector over the past year, with positive Tech sector estimate revisions offsetting negative revisions elsewhere, keeping the aggregate revisions trend in the neutral-to-positive direction.
What has changed over the last couple of quarters is that the positive revisions trend has expanded beyond its aforementioned Tech sector core. We saw this ahead of the start of this earnings season as well as the one prior to that. We will be closely monitoring how estimates for 2026 Q2 evolve as we go through the Q1 earnings season.
As you can see in the above chart, the current expectation is of +19.9% earnings growth in 2026 Q2 on +9.5% higher revenues. The chart below shows how these expectations have evolved in recent weeks.
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Estimates have moved higher for 5 of the 16 Zacks sectors since the quarter got underway. Q2 estimates have increased for Tech, which has been the consistent trend for more than a year now, but estimates have also moved higher for the Energy, Basic Materials, Utilities, and Business Services sectors.
Rising estimates for the Energy sector are tied to developments in the Middle East, with the sector’s favorable revisions trend likely to turn negative again if current optimism about the Iran conflict bears fruit.
On the negative side, Q2 estimates have been cut for 11 of the 16 Zacks sectors since the start of the quarter, with the most pressure on the Transportation, Autos, and Consumer Discretionary sectors.
The chart below shows the overall earnings picture on a calendar-year basis, with double-digit earnings growth expected in 2026 (and the next two years).
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2026 Q1 Earnings Season Scorecard
Through Friday, April 24th, we have seen Q1 results from 138 S&P 500 members or 27.6% of the index’s total membership. Total earnings for these 138 index members are up +23.1% from the same period last year on +9.6% higher revenues, with 76.8% beating EPS estimates and an equal proportion beating revenue estimates.
We get into the heart of the Q1 reporting cycle this week, with almost 800 companies on deck to report results, including 178 S&P 500 members. This week’s line-up has representation from all sectors, ranging from the aforementioned Mag 7 members to the oil supermajors and beyond.
The comparison charts below put the growth rates for the companies that have reported with what we had seen from this same group of companies in other recent periods.
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The comparison charts below put the Q1 EPS and revenue beats percentages for this group of companies relative to what we had seen from them in other recent periods.
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The chart below shows how net margins for the 138 index members that have reported Q1 results compare to other recent periods for this same group of companies.
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The Cyclical – Non-cyclical Divide
The two sets of charts below divide the S&P 500 index into cyclical and non-cyclical sectors, with cyclical sectors accounting for 43.3% of total 2026 Q1 index earnings and non-cyclical sectors accounting for 56.7%.
The cyclical grouping includes the 11 Zacks, out of the 16 in the index, that can broadly be described as ‘cyclical’. These include Consumer Discretionary, Retail, Autos, Basic Materials, Industrials, Construction, Conglomerates, Energy, Finance, Transportation, and Business Services.
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Here is the earnings picture for the cyclical sectors on an annual basis.
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The non-cyclical grouping includes Consumer Staples, Medical, Technology, Aerospace, and Utilities.
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Here is the non-cyclical earnings picture on an annual basis.
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For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Earnings Picture Remains Positive: A Closer Look
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).