Mag 7 financial report expectations improve: Nvidia leads the rise, but signs of slowing growth are evident.

Nvidia's Q3 performance exceeded expectations + raised guidance, temporarily alleviating market concerns about the AI investment boom. The financial report shows that revenue for the quarter rose by 62.5% year-on-year, and net profit rose by 57.3% year-on-year. The net profit for the full year 2025 is expected to double. However, growth expectations are slowing down - a growth of 55% is expected in 2026, dropping to 26.7% in 2027, reflecting a transition of AI infrastructure construction from a period of rapid growth to a normalization period.

What's more concerning is the divergence in the overall performance of Mag 7: year-to-date, the index has risen by 13.7%, underperforming the S&P 500's 14.1%. Nvidia has been a strong performer (+35% YTD), while Tesla saw a net profit plunge of 39.5% in Q3, and Alphabet showed steady performance (+33%).

Data Highlights: The Mag 7 group contributed 34.7% of the market capitalization weight of the S&P 500, but the profit share is only 26% (expected in 2026), which is much lower than the market capitalization share—this suggests that the valuation premium is under pressure. The overall performance of the Q3 earnings season is good, with 94.8% of S&P 500 companies having reported, a year-on-year profit increase of 15.6%, and 83.4% exceeding EPS expectations.

Key observation: The profit expectations for Mag 7 have been continuously raised (compared to data from two weeks ago), but the stock price has already priced in the rise expectations. Whether the future growth momentum can continue to exceed expectations will determine the sustainability of this market trend.