Breakfast News: Focus On Mag7 Earnings

Breakfast News: Focus On Mag7 Earnings

October 27, 2025

1. Eyes Turn to AI and Cloud Results

Magnificent Seven reporting season hits full stride with Microsoft (MSFT +1.72%), Alphabet (GOOG +3.42%) and Meta (META +1.67%) all reporting after Tuesday's market close. Apple (AAPL +1.13%) and Amazon (AMZN +1.51%) follow Thursday afternoon, and investor focus will be on two key things: AI and cloud demand. Analysts expect Mag7 year-over-year quarterly earnings growth to remain steady between 12% and 15% at least into the start of 2026.

• "The Netherlands is an important growth market for us": Amazon plans to invest around $1.6 billion in the Netherlands over the next three years, Eva Faict – the company's Belgium and Netherlands country manager – confirmed this morning. "This investment will substantially benefit Dutch SME entrepreneurs," she added, saying 90% of Dutch Amazon sellers reach customers across 170 countries.
• "Whether or not we're in an AI bubble has become a hotly debated topic": Fool analyst Seth Jayson suggests "Whether you believe in the 'bubble' side of things (Sam Altman does!) or the 'We're just getting started!' side (Sam Altman does!)" depends on the crossover between AI token demand and supply, both expected to soar.

2. Markets Boosted by Trade Optimism

Markets are positive ahead of hoped-for progress in Thursday's planned meeting between President Trump and Chinese President Xi Jinping. The S&P 500 rose 1.9% last week with futures gaining 0.8% in early trading today. The Nasdaq ended Friday up 2.3% on the week, with futures edging up 1% this morning.

• "I believe we've reached a very substantial framework": Speaking to NBC Sunday morning, Treasury Secretary Scott Bessent added he doesn't expect threatened new 100% tariffs on China to go ahead.
• "They'll have to make concessions, I guess we will too": Trump was optimistic speaking on Air Force One on his way to Asia. A China deal is expected to include agreements on rare earths and soybeans, and perhaps progress on Russian oil and nuclear arms.

3. Novartis in Avidity Takeover Deal

Novartis (NVS 0.22%) has agreed to buy Avidity Biosciences (RNA +42.40%), the Swiss pharmaceuticals giant confirmed Sunday. The buyout at $72 per share in cash – 46% above Friday's closing Avidity price – values the deal at $12 billion.

• "Transaction strengthens neuroscience franchise": Developing drugs for genetic neuromuscular diseases, Novartis management spoke of the benefits "Avidity's late-stage neuroscience programs" are expected to bring.
• Beyond the patent cliff: The deal marks a major move for Novartis CEO Vas Narasimhan as he refocuses on biotech innovation, with the company facing competition from generic clones, including its leading heart drug Entresto.

4. Key Earnings to Watch This Week

Stock Advisor recommendation Waste Management (WM 0.49%) will post third-quarter earnings after today's market close. The company beat Q2 revenue and earnings expectations, with healthcare a key driver. Rule Breakers rec NXP Semiconductors (NXPI +0.55%) also reports this afternoon, following a 20.6% free cash flow rise in Q2.

• Superscores of 84 and 77 on our Moneyball database: Watch for updates from two Hidden Gems recs. Visa (V +0.26%) reports Tuesday, with hopes for Q2 revenue and profit growth continuing. Mastercard (MA 0.11%) follows Thursday, after reporting Q2 resilience despite global trade tensions.
• Currently ranked first by Dividend Investor for outsized dividend growth: Chevron (CVX 0.15%) reports Q3 Friday, after seeing Q2 free cash flow more than double – supporting a forecast 4.4% dividend.

5. Your Take

You are Warren Buffett. Let's say Berkshire Hathaway (NYSE: BRK.B) has to use up its entire cash war chest (just shy of $350 billion as of this summer) as soon as possible. What business, or businesses, are you buying today – and, importantly, why? Debate with friends and family, or become a member to hear what your fellow Fools are saying!