The key things Wall Street is looking for in the Mag 7 reports after the bell
Wednesday evening will bring highly awaited results from three “Magnificent Seven” giants. The bar is higher for technology stocks given elevated valuations associated with the artificial intelligence trade. Analysts are eagerly watching for any signs of growth in AI endeavors — whether it’s through physical products such as robots and smart glasses or AI-assisted software and models. Take a look at what Wall Street analysts are expecting to see from reports due from Meta , Microsoft and Tesla after Wednesday’s close: Meta Meta shares have been sideways for months. The stock is up just 1.6% this year and has slipped less than 1% over the past 12 months as investors have viewed the company as a laggard in AI product development and an overspender. Meta’s low valuation, compared with its Big Tech peers, has some analysts optimistic that there’s a buying opportunity. Sixty out of 65 analysts covering the stock rate it a strong buy or buy, according to LSEG. The average consensus price target implies 24% upside. “With imminent FY26 guidance set to leave estimates factoring in all the cost and little upside from AI, now seems opportune for investors to start building positions,” Rothschild & Co Redburn analyst James Cordwell wrote in a Monday note to clients. META 5Y mountain Meta’s stock performance over the past five years. Analysts are primarily looking for details on Meta’s advertising strength and AI spending plans. Cordwell called Meta’s advertising business a “demand machine” and said the company also has potential to improve its large language models with fresh hardware from Nvidia’s new Blackwell systems. Evercore ISI analyst Mark Mahaney is looking to see if Meta’s advertising strength will hold through the holiday quarter, particularly as higher infrastructure costs and employee compensation eat into its total expenses this year. “On META specifically, checks suggest steady-to-slightly improving growth expectations, driven by multiple demand tailwinds that remain intact: Reels, Shopping/Advantage-style commerce formats, and incremental monetization surfaces like overlay/partnership ads, alongside WhatsApp as a continued contributor,” Mahaney wrote in a Sunday note. Investors will also look for an update on Meta’s smart AI glasses, which the company has been developing since 2019 with Ray-Ban maker EssilorLuxottica. Meta earlier this month said it’s delaying the international expansion of its $799 Ray-Ban Display glasses given inventory constraints and strong demand in the U.S. Barclays on Monday told clients that Meta could retain the leadership position in smart glasses. It expects smart glasses “are moving out of niche territory” due to generative AI and a broader range of products and price points that are driving outsized demand. Microsoft Analysts are hoping Microsoft will respond to increasing competition from AI model developers, specifically Anthropic’s Claude. Microsoft shares are up about 7% over the past year, but have lost more than 11% in the past three months since its last quarterly results. The stock dropped even after Microsoft beat fiscal first-quarter expectations on top and bottom lines and reported that its Azure cloud business saw growth of 40%. Details on demand for Azure services and Microsoft’s Copilot suite of AI software tools will be vital, particularly as software stocks have been plunging on fears around AI competition and automation. Morgan Stanley analyst analyst Keith Weiss remains bullish on Microsoft after recent checks on corporate adoption rates of Azure and M365 Copilot reflected increasing use. Weiss reiterated his overweight rating on Jan. 14 note and named the stock a top pick. “Microsoft remains best positioned to capture incremental share of GenAI spend and IT budgets, which is not reflected in shares at 23x GAAP P/E and PEG discount,” he said. Goldman Sachs analyst Gabriela Borges expects Microsoft’s AI spending will translate into steady Azure growth over the next two years, specifically estimating between 40% and 45%g rowth in the next four quarters. Microsoft will need to give more details on its Azure AI stack given recent releases of Anthropic’s Claude Cowork and Claude Excel integration function, Borges said. “We expect Microsoft to detail its durable competitive advantages in the face of evolving new competition … these advantages include distribution, integration into enterprise workflows, security, and the ability to abstract models behind the Azure AI stack,” Borges wrote in a Sunday note to clients. “Ultimately, we believe Copilot may coexist alongside tools like Claude in a similar way to how Microsoft Defender (for endpoint security) exists alongside CrowdStrike — but we do believe Microsoft will need to demonstrate that the quality of Copilot outputs and its ease of use are at least on par with alternatives for competition to become less of an overhang.” Borges kept her buy rating and 12-month price target on Microsoft of $655, which suggests more than 36% potential upside. Tesla Investors know that Tesla’s stock story has moved beyond self-driving cars and onto its ambition to grow its Robotaxi ride-hailing service and Optimus humanoid robot production. The company’s upcoming report is crucial to prove progress on these fronts, analysts say, particularly after Tesla in early January reported a 16% plunge in vehicle deliveries for the fourth quarter and 8.6% decline for the full year. Shares of Tesla are down more than 3% this year. Over the past year, the stock is up 9%. Gains have largely reflect optimism about its opportunities in autonomy and energy storage. Further appreciation will depend on robotaxi fleet expansion and rollout and signs that Optimus could become a real-world product. Barclays analyst Dan Levy said that Tesla shares could move higher if the company can grow its ridehail market share in Austin alone, essentially showing progress on scaling its fleet as Alphabet -owned Waymo has done in other U.S. markets. “The market is already ascribing significant value to Tesla for this growth — Tesla is one of two publicly traded companies in North America with a market cap of $100bn+ and a PE ratio of more than 125x,” Barclays analyst Dan Levy said in a Monday note to clients, keeping his equal weight rating on Tesla unchanged. “So given this value is already in the stock, we believe that for the stock to further outperform, Tesla will need to show clear progress on its efforts in Robotaxi, FSD, and Optimus — hopes of out-year opportunities won’t be sufficient.” Cantor Fitzgerald analyst Andres Sheppard sees a “material opportunity for TSLA over the long term” but hopes for further details around Optimus’ mass production timeline and fleet size. He also expects Tesla to enter the self-driving trucking industry during this decade and is looking for an update on its production. Tesla has also been catching investor attention for its potential role in space-based technology, which CEO Elon Musk has been loudly bullish on given the energy benefits of running AI chips from outer space. William Blair analyst Jed Dorsheimer said Tesla could announce plans to integrate its AI infrastructure into efforts to build space-based data centers. But Barclays’ Levy warned Musk’s plans to publicly launch SpaceX could divert attention away from Tesla, either through splitting the Tesla retail investor base or diverting Musk’s own focus away from Tesla and onto SpaceX.
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