Follow the Magnificent Seven US tech companies through earnings, capital spending and profit forecasts.
Alphabet’s third-quarter revenue rose 25% year over year, but search revenue missed expectations and operating profit fell short of consensus. Google Cloud revenue doubled and exceeded Wall Street expectations, but still fell short of some optimistic investors’ expectations.
Google search and overall operating profit fell short of expectations. Its cloud business exceeded market consensus but did not meet the higher buy-side threshold; Microsoft Azure grew 48%, with both revenue and operating margin above guidance.
Alphabet’s third-quarter revenue rose 25% year over year, and its cloud business grew 103%; search usage accelerated while advertising growth slowed, and heavy capital spending and TPU inventory buildup turned free cash flow negative.
Search revenue growth fell from 17% in the previous quarter to 12%. Cloud revenue beat market consensus but fell short of some buy-side thresholds; services margins declined sequentially for a second straight quarter, and free cash flow turned negative.
Year-over-year search revenue growth fell from 17% to 12%, while rising AI search usage is temporarily weighing on monetization; cloud revenue grew 103%, but computing costs and capital expenditure are pressuring profits and cash flow. Bernstein lowered its price target to $325.
HSBC expects Apple’s revenue for the quarter ended September 2026 to rise 10.6% year on year, slowing from the previous quarter. Early sales of the iPhone 18 Pro and preorders for the foldable Duo have been positive, but the Duo’s inner-screen issues and chip costs warrant attention.
Barclays raised its Tesla price target from $370 to $450, primarily reflecting a potential SpaceX acquisition premium, while also taking a positive view of vehicle deliveries, energy storage demand and Robotaxi progress; shareholder votes, profits and cash flow remain key constraints.
Unsupervised Robotaxi mileage has grown nearly 9-fold in three months, while Optimus still faces a lengthy ramp-up to mass production. Deutsche Bank believes the shareholder voting threshold and deal premium for a potential SpaceX merger could affect Tesla’s share price.
Meta plans to raise equity capital in two stages: a near-term underwritten offering of approximately 35 billion dollars, followed by a market offering plan of approximately 60 billion dollars. Goldman Sachs forecasts combined capital expenditure of approximately 480 billion dollars for 2027–2028, with free cash flow turning negative in 2027.
Goldman Sachs expects Apple's iPhone revenue to grow 15% year over year in the fourth quarter of fiscal 2026, while unit sales decline 4%. The iPhone Duo and the full-year effect of price increases are expected to support growth in the next fiscal year, while component costs and slower services growth constrain profitability.
Morgan Stanley believes the rise of open-weight models will expand enterprises’ choice of models and the scope of AI use. Microsoft can turn this demand into consumption revenue through Azure, Foundry, Fabric and M365; however, lower revenue per inference and pressure on gross margins also affect this path.
Bank of America expects AWS revenue to grow 40% year over year in the third quarter, above market expectations, but slowing retail growth, fuel costs and continuously rising capital expenditure will test profits and cash flow.
Excluding currency effects, Meta’s third-quarter revenue grew 26% year over year, slightly below the 27% recorded in the second quarter. Operating income excluding legal costs beat market expectations by about 13%, but the reported margin was significantly weighed down by settlement costs.
Meta has launched a phased equity financing plan to fund its expanding AI investment. Goldman Sachs is positive on the core business and Muse’s early performance, but expects margins to remain under pressure; its valuation does not yet incorporate the new financing.
Goldman Sachs expects Apple’s revenue for the September quarter to be broadly in line with consensus, with iPhone growth driven mainly by price increases and a higher share of premium models; its profit expectations for the December quarter, however, are below consensus. The target price rises to 390 dollars, mainly reflecting greater confidence that Duo will drive upgrades, rather than higher earnings forecasts.
JPMorgan believes that Pro series delivery lead times remain in line with the same period last year following price increases, signaling resilient demand. However, Pro supply in China is now clearly ample, while Duo's revenue contribution depends on an improvement in supply.
Bank of America raised its revenue forecast and price target for Meta but slightly lowered its 2027 earnings-per-share estimate: advertising is benefiting from AI, while Muse and enterprise services open up new revenue opportunities, but investment comes before monetization, and capital spending and financing pressure are both rising.
Third-quarter revenue beat expectations, and Muse makes the path to AI monetization clearer. But expansion costs are coming first: BofA cut its 2027 earnings-per-share forecast and expects free cash flow to turn negative. The higher price target mainly reflects a higher valuation multiple.
Evercore ISI says delivery times lengthened across all regions and configurations on the first day of Duo preorders, signaling positive initial demand, although initial supply is also affecting delivery schedules. Meanwhile, the Pro series is working through launch orders, with delivery times broadly unchanged or shorter.
Bank of America expects Microsoft’s first-quarter results for fiscal 2027 to be broadly in line with market consensus. It raised its medium-term forecasts on the strength of Azure capacity expansion and Copilot monetization. But full-year capital expenditure including leases is expected to rise to 220.7 billion dollars, and free cash flow is set to contract significantly.
