[LIVE] NVIDIA FY2026Q1 Earnings Conference Call

The May rebound follows a harsh fall after Trump’s ‘liberation day’ tariffs shocked investors, businesses and U.S. trade partners in early April

Megcap tech stocks have staged a major comeback in May, with Nvidia’s earnings on Wednesday serving as a test of the sector’s resilience.

Megacap technology stocks have gotten a huge boost in May, as investors seek to turn the page on recent tariff tumult and as Nvidia Corp.’s earnings loom.

U.S. banks might kick off earnings season and help set the tone, but it’s the tech companies that lately have had the final word on whether the stock market had a good quarter or not.

With that in mind, Wednesday’s fiscal first-quarter earnings from artificial-intelligence darling Nvidia have a special place on the week’s calendar.

Shares of Nvidia climbed 3.2% on Tuesday, a day before its quarterly results were due, and are up 24.4% on the month so far, according to FactSet. The AI chip maker will be the final “Magnificent Seven” company to walk the earnings gantlet this quarter.

While 2025 has been fraught on Wall Street, the past few weeks have benefited this particular group of tech titans. That’s because investors worried about tariffs and their potential toll on the economy once again have turned to technology names, instead of the broader stock market, as a port in the storm.

This chart shows the huge gains of the “Magnificent Seven” stocks since the lows of early April, against a rise of about 4.4% for the broader S&P 500 index, as well as a roughly 1.3% gain for its equal-weight version.

“I do think they are viewed, because of their business models and pervasiveness,” as a kind of “safer play, no matter what happens with the economy,” said Melissa Brown, head of investment decision research at SimCorp. “And despite their higher valuations, as a group, those have been the ones to really be able to deliver on earnings expectations.”

A megatech comeback

The Big Tech comeback in May followed a harsh fall after President Donald Trump’s “liberation day” tariffs shocked investors, businesses and U.S. trade partners in early April.

Trump’s proposed “maximalist” levies triggered a collective $2.12 trillion loss of market capitalization for the “Magnificent Seven” companies between the market’s close on April 2 to the lows of April 8, according to Dow Jones Market Data. In addition to Nvidia, Amazon.com Inc., Microsoft Corp., Google-parent Alphabet Inc., Meta Platforms Inc., Tesla Inc. and Apple Inc., make up this group.

Trump’s trade fight has evolved since early April to include “pauses” on some tariffs to help cajole trade partners into quicker negotiations, as well as the promise of more deals to come after the U.S. and U.K. outlined a new trade agreement.

After details of the U.S.-U.K. deal emerged, the “Magnificent Seven” added back $3.7 trillion in market cap between the April 8 low and a May 14 peak, bringing their combined valuation to about $16.8 trillion, according to Dow Jones Market Data.

Since then, sharply higher bond yields have failed to dull demand for this popular group of stocks, a trend strategists attributed to their strong earnings, as well as optimism around plans to keep up AI spending.

Earnings home stretch

While first-quarter earnings have been good for the S&P 500 index, they’ve been even better for technology companies.

The S&P 500’s blended earnings growth rate was pegged recently at 12.9% for the first quarter versus a year before, well above the 10-year average of 8.9%, according to FactSet data.

But that’s only part of the story. “The Communication Services sector reported the second-highest (year-over-year) earnings growth rate of all 11 sectors at 29.2%,” John Butters, senior earnings analyst at FactSet, wrote in a May 23 report.

Alphabet and Meta, however, ranked as the biggest contributors to the sector’s earnings growth. Without those two companies, its blended earnings growth rate would have fallen to 9.6% from 29.2%, according to Butters.

Still, this chart shows just how much the “Magnificent Seven” stocks have outpaced the broader market, when comparing their earnings growth against the rest of the S&P 500’s 493 companies.

Bar chart showing Magnificent Seven earnings growth outpacing the rest of the market.

Their collective capex guidance for 2025 was pegged at about $330 billion, according to Jeff Buchbinder, chief equity strategist at LPL Financial. “After Nvidia reports this week, these seven companies will likely end up driving nearly half of the S&P 500’s EPS growth overall,” he wrote in a Monday client note.

The broader S&P 500 posted a 2.1% gain on Tuesday, after Trump said over the long holiday weekend that his idea of a 50% tariff against the E.U. would be delayed until July 9, while the Dow Jones Industrial Average gained 1.8% and the Nasdaq Composite Index rose 2.5%, according to FactSet.