Zacks Earnings Trends Highlights: Microsoft and Nvidia

For Immediate ReleaseChicago, IL – September 18, 2025 – Zacks Director of Research Sheraz Mian says, "Excluding the Tech sector contribution, Q3 earnings for the rest of the S&P 500 index would be up only +2.0% (vs. +5.1% otherwise)"Q3 Earnings Outlook Remains Positive: A Closer LookNote: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>Here are the key points:For 2025 Q3, total S&P 500 index earnings are expected to be up +5.1% from the same period last year on +6.0% higher revenues.The positive revisions trend makes the overall setup for the Q3 earnings season favorable, but it raises the odds of actual results coming up short of expectations. In other words, it is reasonable to worry whether expectations for the period are too high, particularly for the Tech and Finance sectors.Excluding the Tech sector contribution, Q3 earnings for the rest of the S&P 500 index would be up only +2.0% (vs. +5.1% otherwise).For the Magnificent 7 group, Q3 earnings are expected to be up +12.2% from the same period last year on +14.6% higher revenues, which would follow the group’s +26.4% earnings growth on +15.5% revenue growth in the preceding period.Are Q3 Earnings Expectations Too High?As we have consistently highlighted in recent weeks, the overall revisions trend remains positive, with estimates for the back half of the year steadily going up.For 2025 Q3, the expectation is for earnings growth of +5.1% on +6.0% revenue gains.Since the start of Q3 this month, estimates have increased modestly for five of the 16 Zacks sectors, including Finance, Technology, Energy, Retail, and others.On the negative side, Q3 estimates remain under pressure for the remaining 11 Zacks sectors, with significant declines to estimates for the Medical, Basic Materials, Construction, Transportation, and other sectors.For the Tech sector, Q3 earnings are expected to be up +11.9% from the same period last year on +12.5% higher revenues.You can see the Tech sector’s positive revisions trend by looking at bellwether Tech sector operators like Microsoft MSFT, Nvidia NVDA and others.Microsoft is currently expected to bring in $3.65 per share in earnings in Q3 on $75.37 billion in revenues, representing year-over-year changes of +10.6% and +14.9%, respectively. Microsoft’s Q3 EPS estimate has increased from $3.64 a month ago and $3.53 two months ago.The current Q3 EPS estimate for Nvidia has risen +2.6% over the past month and +4.4% over the last two months.The Earnings Big PictureThe aforementioned favorable revisions trend validates the market’s rebound from the April lows. It will be interesting to see if this positive revisions trend will remain in place, as the Q3 reporting cycle gets underway.The robust backlog numbers from Oracle suggest that the trend can continue. But we have to keep in mind that Oracle’s pipeline strength primarily reflects developments in the artificial intelligence space that were already being credited for the Mag 7 group’s prominence. It remains to be seen whether the favorable trend will be reflected in non-tech areas of the economy.Free: Instant Access to Zacks' Market-Crushing StrategiesSince 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.Get all the details here >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. 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Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks