Sentiment towards Magnificent 7 and software stocks has been negative due to AI-related concerns. Amazon, Alphabet, and Microsoft are increasing capital budgets for AI initiatives. Overspending on AI infrastructure and AI capabilities threaten software companies’ long-term profitability. Nvidia leads in performance, with Q4 results projected to show significant growth.

Nvidia’s revenue is expected to reach $312 billion in fiscal year 2027. Q4 earnings are estimated at $1.52 EPS on $65.56 billion in revenues, showing strong growth. Nvidia’s AI investments have been fruitful, but questions remain about when the good times will end. The company’s CEO is a prominent AI advocate.

The Magnificent 7 group’s earnings are expected to rise by 24.2% in Q4 with 18.9% higher revenues. They account for 25.5% of S&P 500 earnings in 2025 and carry a 32.7% weight in market capitalization. Q4 earnings season has seen 75.2% of companies beating EPS estimates. Tech players like Salesforce and HP are reporting results.

The Director of Research at Zacks has highlighted a top stock pick with significant upside potential. This company targets millennial and Gen Z audiences, generating substantial revenue. The current pullback presents an opportunity for investors. The pick is expected to outperform previous Zacks’ Stocks Set to Double.

Read more at Nasdaq: Nvidia Earnings Loom: A Closer Look at the Mag 7 Earnings Picture