Earnings Preview: Magnificent 7 Quarterly Results on Tap
Editor’s note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.
Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. An investor could lose the full principal value of his or her investment in a single day. Investing in the Funds is not equivalent to investing directly in AAPL, AMZN, GOOGL, META, MSFT, NVDA and TSLA.
Traders are gearing up for a cavalcade of earnings reports from the "Magnificent 7" stocks: Apple, Microsoft, Amazon, Alphabet, Meta Platforms, Tesla, and Nvidia. Although summer can be slow, these are the announcements that can create big market reactions. Quarterly results from the market-leading Mag 7 could also set the tone for the rest of the market in coming months.
Here’s an earnings preview designed for traders looking for key catalysts as these behemoths start trotting out their latest quarterly numbers:
Apple (AAPL): Expected to report around July 23
- iPhone Sales: Analysts will closely scrutinize iPhone sales figures, especially the performance of the iPhone 15 series, as this will indicate consumer demand and potential revenue growth.
- Services Revenue: Growth in Apple's services segment (App Store, Apple Music, iCloud) is crucial for diversifying the company's revenue streams amid hardware market saturation.
- China Market: Performance in China, amid ongoing geopolitical tensions and economic slowdown, will be a focus to gauge the impact of external factors on sales.
- AAPU/AAPD: The Direxion Daily AAPL Bull 2X (Ticker: AAPU) Shares and Bear 1X Shares (Ticker: AAPD) seek daily investment results, before fees and expenses, of 200% and 100% of the inverse (or opposite), respectively, of the performance of the common shares of Apple, Inc (NASDAQ: AAPL).
Microsoft (MSFT): Expected to report around July 30
- Cloud Growth: Azure's growth rate compared to rivals like AWS and Google Cloud will be a closely watched metric that reflects competitive positioning.
- AI Integration: Progress in integrating artificial intelligence (AI) into Microsoft's software suite and the emergence of new AI-related revenue streams will be of significant interest.
- Gaming Segment: Updates on Xbox and gaming revenue, especially in light of the recent acquisition of Activision Blizzard, will help assess the impact on Microsoft's entertainment segment.
- MSFU/MSFD: The Direxion Daily MSFT Bull 2X (Ticker: MSFU) and Bear 1X Shares (Ticker: MSFD) seek daily investment results, before fees and expenses, of 200% and 100% of the inverse (or opposite), respectively, of the performance of the common shares of the Microsoft Corporation (NASDAQ: MSFT).
Amazon (AMZN): Expected to report around August 1
- Amazon Web Services (AWS) Performance: Performance of Amazon Web Services (AWS) will be under the microscope, as it remains a primary engine of growth.
- Retail Sales: E-commerce growth, particularly in North America, and updates on Prime membership numbers and sales will be key indicators of retail health.
- Cost Management: Wall Street will be interested in measures taken to control shipping and fulfillment costs amidst elevated inflation*, as cost management remains a significant concern.
- AMZU/AMZD: The Direxion Daily AMZN Bull 2X (Ticker: AMZU) and Bear 1X Shares (Ticker: AMZD) seek daily investment results, before fees and expenses, of 200% and 100% of the inverse (or opposite), respectively, of the performance of the common shares of Amazon.com, Inc. (NASDAQ: AMZN).
Alphabet (GOOGL): Expected to report around July 23
- Ad Revenue: The performance of Google’s ad business, particularly in a shifting digital ad landscape, will be a core revenue driver and a key focus.
- Cloud Growth: Google Cloud's growth and its path to profitability will be important factors for revenue diversification.
- YouTube Metrics: Engagement and monetization trends on YouTube, especially with the rise of short-form video, could significantly impact post-earnings stock movement.
- GGLL/GGLS: The Direxion Daily GOOGL Bull 2X (Ticker: GGLL) and Bear 1X Shares (Ticker: GGLS) seek daily investment results, before fees and expenses, of 200% and 100% of the inverse (or opposite), respectively, of the performance of Class A shares of Alphabet Inc. (NASDAQ: GOOGL).
Meta Platforms (META): Expected to report around July 31
- User Engagement: Daily and monthly active user metrics across Facebook, Instagram, and WhatsApp will be crucial indicators of user engagement.
- Ad Revenue: The impact of changes in ad targeting policies and competition from platforms like TikTok on Meta's ad revenue will be closely watched by analysts.
- Metaverse Investments: Updates on expenditure and progress in Meta’s ambitious metaverse plans will draw significant interest, considering the high levels of investment in this area.
- METU/METD: The Direxion Daily META Bull 2X (Ticker: METU) and Bear 1X Shares (Ticker: METD) seek daily investment results, before fees and expenses, of 200% and 100% of the inverse (or opposite), respectively, of the performance of the common shares of Meta Platforms, Inc. (NASDAQ: META).
Tesla (TSLA): Expected to report around July 23
- Delivery Numbers: Quarterly vehicle delivery and production figures will be key indicators of operational performance and demand.
- Profit Margins: Tesla's profit margins amidst increasing competition and production costs will be critical to understanding the company's financial health.
- Energy Segment: Growth in Tesla’s energy generation and storage segment, including solar products, will diversify the company's revenue streams and attract investor attention.
- TSLL/TSLS: The Direxion Daily TSLA Bull 2X (Ticker: TSLL) Shares and Bear 1X Shares (Ticker: TSLS) seek daily investment results, before fees and expenses, of 200% and 100% of the inverse (or opposite), respectively, of the performance of the common shares of Tesla, Inc. (NASDAQ: TSLA).
Nvidia (NVDA): Expected to report around August 28
- Data Center Revenue: Demand for Nvidia's graphics processing units (GPUs) in data centers, driven by AI and machine learning applications, will be a major growth area to watch.
- Gaming Revenue: Sales trends in Nvidia's gaming segment and adoption of new graphics cards will be critical for revenue growth.
- Automotive Segment: Progress and revenue from Nvidia's autonomous vehicle technology and partnerships will represent potential future growth and are areas of interest.
- NVDU/NVDD: The Direxion Daily NVDA Bull 2X (Ticker: NVDU) and Bear 1X Shares (Ticker: NVDD) seek daily investment results, before fees and expenses, of 200% and 100% of the inverse (or opposite), respectively, of the performance of the common shares of the Nvidia Corporation (NASDAQ: NVDA).
Trading the Seven Largest NASDAQ Stocks
For traders looking to play the group in a single trade, the Direxion Daily Concentrated Qs Bull 2X (Ticker: QQQU) and Bear 1X Shares (Ticker: QQQD) seek daily investment results, before fees and expenses, of 200%, or 100% of the inverse (or opposite), of the performance of the Indxx Front of the Q Index*. The Indxx Front of the Q Index is provided by Indxx and is designed to track the performance of the seven largest NASDAQ listed companies.
*Definitions and Index Descriptions
An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.
The Indxx Front of the Q Index is provided by Indxx and is designed to track the performance of the seven largest NASDAQ listed companies.
Direxion Shares ETF Risks – An investment in the ETFs involves risk, including the possible loss of principal. The ETFs are non-diversified and include risks associated with concentration that results from an ETF’s investments in a particular industry, sector or company, which can increase volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. The ETFs do not attempt to, and should not be expected to, provide returns which are a multiple of respective underlying security for periods other than a single day. For other risks including leverage, correlation, daily compounding, market volatility and risks specific to an industry, sector or company, please read the prospectus.