Magnificent Seven Earnings Season Recap: Leveraged Single Stock ETFs Edition

Tesla highlights and ETFs to watch

This earnings report from Tesla was genuinely unexpected, though in hindsight, perhaps it should have been anticipated given the cult-like tendencies of its investor base.

Before the earnings release, Tesla was among the worst performers in the S&P 500 this year, with a year-to-date loss of 42.8%, and its stock price languishing at $142. However, following the earnings announcement, Tesla's stock price surged nearly 16% to $194 in after-hours trading. RIP bears.

Interestingly, the earnings themselves were far from stellar. Tesla reported a 9% year-over-year revenue decline and a 55% fall in profits, with earnings per share of 45 cents versus the 50 cents that analysts had anticipated. Operating margins also missed expectations, coming in at 5.5% compared to the forecasted 6.6%. By all accounts, it was a miss on every major metric.

Yet Elon Musk's comments during the earnings call seemed to reignite investor enthusiasm. He announced plans for a new, more affordable model, significant investments in AI development and infrastructure, and a showcase of the long-awaited robotaxi in August. Additionally, he mentioned a workforce reduction of 10% as a cost-cutting measure.

ETF Winners:

• GraniteShares 2x Long TSLA Daily ETF
  TSLR
  +4.34%
• GraniteShares 1.25x Long TSLA Daily ETF
  TSL
  +2.66%
• Direxion Daily TSLA Bull 2x Shares
  TSLL
  +4.27%

ETF Losers:

• Direxion Daily TSLA Bear 1X Shares
  TSLS
• GraniteShares 2x Short TSLA Daily ETF
  TSDD
  -4.31%

Alphabet Highlights and ETFs to Watch

Alphabet delivered a clear-cut earnings beat accompanied by optimistic guidance. The tech giant reported earnings per share of $1.89, comfortably surpassing the expected $1.51, and generated $80.54 billion in revenue, which also beat the forecast of $78.59 billion.

Further bolstering investor confidence, Alphabet declared its first-ever dividend of $0.20 per share, a move reminiscent of Meta's dividend initiation in February. Additionally, the company announced $70 billion in additional share buybacks.

Following these announcements, Alphabet's shares surged by 10% in after-hours trading, pushing the company's market capitalization to $2.15 trillion.

ETF Winners:

• Direxion Daily GOOGL Bull 2X Shares
  GGLL
  +0.9%

ETF Losers:

• Direxion Daily GOOGL Bear 1X Shares
  GGLS
  -0.58%

Meta Highlights and ETFs to Watch

Meta's earnings this quarter brought back memories of 2022 when investors rushed to sell after CEO Mark Zuckerberg's costly bet on the Metaverse fell flat.

This quarter, despite Meta beating earnings per share expectations at $4.71 versus $4.32 and revenue forecasts at $36.46 billion compared to $36.16 billion, the stock plummeted nearly 19% after hours.

The drop mirrored last year's declines, fueled by Zuckerberg's persistent emphasis on heavy investment in ambitious projects like VR headsets, alternative reality glasses, Meta AI, and the large language model Meta Llama 3, while explicitly stating that monetization was not a current priority.

ETF Winners:

• None currently available in the U.S. market.

ETF Losers:

• GraniteShares 2x Long META Daily ETF
  FBL
  +0.23%
  experienced significant losses due to the sharp decline in Meta's stock following the earnings call.

Apple Highlights and ETFs to Watch

Apple's recent earnings presented a mixed picture: overall revenue was down by 4%, with iPhone sales experiencing a 10% drop. However, the company managed to surpass EPS and revenue expectations, reporting $1.53 versus the anticipated $1.50 and $90.75 billion against forecasts of $90.01 billion.

Despite the mixed financials, Apple's stock surged 7% in after-hours trading. This positive investor reaction followed the announcement of an additional $110 billion authorization for share repurchases and a small dividend increase to $0.25 per share, up from $0.24.

ETF Winners:

• GraniteShares 2x Long AAPL Daily ETF
  AAPB
  +0.01%
• Direxion Daily AAPL Bull 2X Shares
  AAPU
  -0.04%

ETF Losers:

• Direxion Daily AAPL Bear 1X Shares
  AAPD
  +0.03%

Microsoft Highlights and ETFs to Watch

Finally, let's turn our attention to Microsoft, which reported standout results. Revenue hit $61.9 billion, marking a 17% increase, while operating income rose by 23% to $27.6 billion. Net income saw a 20% rise to $21.9 billion, and diluted earnings per share grew by 20% to $2.94, surpassing the $2.76 estimate.

A significant driver of this performance was Microsoft's cloud business, which generated $35.1 billion in revenue, up 23% year-over-year due to surging demand for AI solutions.

Despite these impressive figures, Microsoft's stock experienced little movement, edging down just 1% in after-hours trading. This modest change isn't entirely surprising given Microsoft's relatively low beta of 0.88, indicating less volatility compared to the broader tech sector.

ETF Winners:

• Direxion Daily MSFT Bear 1X Shares
  MSFD
  +0.18%

ETF Losers:

• Direxion Daily MSFT Bull 2X Shares
  MSFU
  -0.46%
• GraniteShares 2x Long MSFT Daily ETF
  MSFL
  -0.6%

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.