Magnificent 7 earnings outlooks stay bullish even under AI pressure, bear market
The issue
The Index reached a 16% year-to-date decline on March 18, and Meta's fall that day meant all Mag 7 stocks had turned negative in 2025. Nvidia Corp.'s announcement of new ventures and more powerful AI chips mitigated only some of those losses the following day.
Despite this drop and a current bear market, analysts have remained largely bullish on future earnings, with forecasts for aggregate earnings per share (EPS) for 2027 rising by 2%. Future forecasts are roughly 50% higher than they were in 2024. Nvidia specifically had its fiscal 2027 data center revenue estimate increased to more than $234 billion, with 2028's projections rising to $260 billion.
Nvidia Corp. CEO Jensen Huang said 'AI is going through an inflection point' and predicted that data center spending will 'very soon' reach $1 trillion annually.
Bloomberg Intelligence sees China's recent AI gains as a pressure point for the Mag 7 as advancements will allow Chinese companies to spend less on LLM training and more on agents and applications. As Tencent Holdings Ltd. signaled it will invest $10 billion in AI infrastructure this year, the Mag 7's 25 times forward PE closed in on the Hang Seng Tech Index's 19.
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