Earnings season is a time when investors like to see a “beat and raise” pattern. That is, companies report sales and earnings that surprise the market by coming in ahead of analysts’ estimates. Then the analysts raise their estimates for upcoming quarters, and the pattern supports rising stock prices over time.
Profit margins vary widely by industry. They are most useful when looking at their movement for individual companies, or when comparing similar companies. Before looking at results for the full screen, you might want to see a comparison of margins for the “Magnificent Seven” stocks, which have contributed most of this year’s 15% total return for the S&P 500. All hasn’t been rosy, with Joseph Adinolfi reporting late in October that the seven companies — Microsoft Corp. MSFT, +0.81%, Apple Inc. AAPL, +0.77%, Amazon.com Inc. AMZN, +1.50%, Nvidia Corp. NVDA, -0.43%, Alphabet Inc. GOOGL, +0.17% GOOG, +0.24%, Meta Platforms Inc. META, +0.
So the margin picture for the Magnificent Seven has mostly been good, and investors can expect improvement for Nvidia as well when the company reports.
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