Magnificent Seven earnings growth is on track to trail the rest of the S&P 500 for the third quarter, according to FactSet earnings analyst John Butters. The blended earnings-per-share growth estimate for the seven companies stands at 22.6 percent, against 32.6 percent for the other 493 companies in the index.
The Magnificent Seven earnings figure has fallen from 33.6 percent a month earlier, a drop of 11 percentage points in about four weeks. Five of the seven companies have so far reported earnings-per-share growth below the rest of the index. Nvidia and Apple have yet to report their latest quarterly results, so their numbers are still estimates in the blended figure.
The seven companies are Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. They are the largest companies in the index by market value, and their results carry weight far beyond their count. When their growth slows relative to the other 493 firms, the balance of earnings growth across the whole index shifts with it.
Magnificent Seven earnings estimates fall in a month
A month ago, the seven were expected to grow earnings by 33.6 percent for the third quarter. That estimate now stands at 22.6 percent. The rest of the index moved the other way, or held up better, to reach 32.6 percent. The gap between the two groups is now about 10 percentage points.
The change matters because Magnificent Seven earnings had led the index for years. FactSet noted that the group had reported higher year-over-year earnings growth than the other 493 companies over the past several quarters. The third-quarter estimates point to that run ending, at least for this reporting season.
Earlier in the season, FactSet had put Magnificent Seven earnings growth for the third quarter at 33.2 percent, ahead of 27.7 percent for the rest of the index. In that earlier estimate, Nvidia and Meta Platforms were the top two contributors to the group’s growth. Without those two companies, estimated growth for the remaining five fell to 7.5 percent.
For the index as a whole, FactSet named Micron Technology, Nvidia, Meta Platforms, EchoStar Corporation and Boeing as the top five contributors to year-over-year earnings growth for the third quarter, in that order. Without Micron and Nvidia, the blended growth rate for the S&P 500 would fall to 20.0 percent from 29.0 percent.
Why Magnificent Seven earnings are lagging
The shortfall is not confined to one company. Five of the seven individually show third-quarter growth below the broader index, according to the FactSet figures reported by Dow Jones. That spread across the group is why the blended estimate fell as far as it did, rather than moving on a single weak report.
Two results are still to come. Nvidia and Apple have not yet reported their latest quarterly results, and their numbers will update the blended estimate when they arrive. A strong result from either company could lift the Magnificent Seven earnings figure, while a weak one would pull it further below the rest of the index. Until both report, the 22.6 percent figure remains an estimate built from reported results and forecasts.
Magnificent Seven earnings outlook for the fourth quarter
Analysts expect the lagging trend to continue into the fourth quarter. For the fourth quarter of 2026, the other 493 companies are forecast to grow earnings by 30.6 percent from a year earlier, against 23.6 percent for the Magnificent Seven. If those turn out to be the actual growth rates, it will mark the first time the seven have reported lower earnings growth than the other 493 companies since the fourth quarter of 2022.
In that quarter, the seven reported earnings growth of negative 30.6 percent, against 1.6 percent for the rest of the index. The fourth-quarter forecast for 2026 is a long way from those figures. Both groups are expected to grow, and the gap of 7 percentage points is narrower than the 10-point gap in the third-quarter estimates.
The shift does not mean Magnificent Seven earnings have stopped growing. Magnificent Seven earnings growth of 22.6 percent for the third quarter and 23.6 percent forecast for the fourth quarter are both strong in absolute terms. The change is relative: for the first time in nearly four years, the rest of the index is growing faster. Investors who bought the seven for their earnings lead now face a season in which that lead sits with the other 493 companies.
FactSet’s John Butters derived the estimates by comparing the projected earnings of the seven with those of the remaining index members. Nvidia and Apple are expected to report their latest quarterly results next, and those reports will show whether the projected slowdown is confirmed.