What’s News in Earnings: How Magnificent Can the Magnificent Seven Get?

WSJ What’s News

The Wall Street Journal

News, Daily News

4 • 4K Ratings

🗓️ 5 August 2025

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

Bonus Episode for Aug. 5. Six of the so-called Magnificent Seven companies have reported quarterly earnings, with only Nvidia, the most-valuable of them all, yet to release its results. Heard on the Street’s Asa Fitch talks about how much better it can get for the stocks harnessing AI-mania to propel the stock market. Asa, who also writes the Journal’s new AI newsletter, says that the hyperscalers show no sign of slowing their furious pace of capital investment in infrastructure, but he cautions that continuing to top investors’ lofty expectations is becoming more of a challenge. Markets AM writer Spencer Jakab hosts this special bonus episode of What's News in Earnings, where we dig into companies’ earnings reports and analyst calls to find out what’s going on under the hood of the American economy. Sign up for the WSJ's free Markets A.M. newsletter. Sign up for the WSJ's free WSJ AI & Business. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:33.3	Hey listeners, it's Tuesday, August 5th. I'm Spencer Jacob for the Wall Street Journal, and this is What's News and Earnings. Our look at the broad themes that stood out in the latest earning season. So earning season continues, but six of the companies that have been on everyone's minds, the Magnificent Seven, have shown us how they did in the last quarter, and more importantly, what they're planning to do with some of those billions of
0:54.7	dollars in cash flow. Heard on the street writer Asa Fitch, who also co-authors the journal's new
0:59.6	AI newsletter, is here to shed some light on their results and the capital expenditure Bonanza.
1:28.7	So, Asa, if my math is correct, the four hyperscalers, that's Amazon, Meta, Microsoft, and Google, his parent is alphabet, that are investing the most in AI infrastructure, all of them members of the Mac 7, planned to invest more than $300 billion this fiscal year and close to $400 billion in the coming 12 months, mostly on
1:35.4	AI stuff. What happened to be in capital light? Those days are gone. Today, the watchword is
1:41.4	who can spend the most money on AI because AI is the thing that's going
1:45.0	to drive forward these businesses in the near future and the long future, at least in the minds
1:49.3	of many of the leaders of these tech companies. So you can't afford to not spend money on AI.
1:54.0	And you can't afford to spend perhaps less than your competitor on AI because, first of all,
2:00.3	you have the money.
2:01.4	These tech companies are minting money.
2:03.2	It's not like they're sort of going into the piggy bank, borrowing tons of money,
2:06.7	getting big into debt because they want to splurge on AI.
2:10.0	They're getting money out of their business.
2:12.4	They're spending that money largely on AI.
	...

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