Major tech companies released strong third-quarter earnings in late October, exceeding market expectations and reinforcing their dominance in the industry. These companies have continued to push stocks to a higher level as investors analyze the impact of ongoing innovations.

The companies known as the “Magnificent Seven” — Apple Inc., Microsoft Corp., Amazon Inc., Alphabet Inc., Meta Platforms Inc., Nvidia Corp. and Tesla Inc. — total around 31% of the S&P 500 index.

Their earnings reveal revenue growth across several key areas, highlighting advancements in artificial intelligence, cloud computing, and innovations in consumer technology.

“Tech is going to have a far more outsized impact on the broader market,” Deirdre Bosa, a CNBC reporter, said about the earnings. “It could be responsible for a one-and-a-half percentage point contribution to the S&P’s overall expected earnings growth.”

Apple is the market leader with 9.9% of the total market capitalization within the Nasdaq composite. Apple’s most recent annual report showed its service revenue increased by 13% — rising to $96.17 billion in September — from $85.2 billion in September 2023. Apple’s gross margin remained strong, valued at $180.7 billion in the third quarter, which is a 6.86% increase from $169.1 billion in 2023.

Microsoft, Amazon, and Alphabet remained powerhouses in cloud computing due to increasing demand for AI-driven services. Both have invested heavily in AI, driving substantial growth by expanding their cloud infrastructure and developing innovative AI solutions that cater to consumers, delivering strong financial performances.

“The data center cloud business is strong. Of all the groups, this is the one where we can show the most tangible evidence of the impact of AI,” Daniel Morgan, a portfolio manager at Synovus Trust, told the Wall Street Journal.

Microsoft reported a significant increase in revenue driven by its cloud computing service, Azure, and AI integrations. Microsoft’s service revenue increased 22.8% from $40.98 billion in 2023 to $50.313 billion in 2024. Its gross margin rose from $40.22 billion in 2023 to $45.49 billion in 2024, with a 13.6% increase in operating income.

Amazon website service continues to be a high-margin business, with a 55% increase in net income, rising to $15.33 billion in 2024. Amazon generated $25.97 billion in net cash from operating activities during the quarter, which is up 22.41% from $21.22 billion in the same period in 2023.

Alphabet’s Google Cloud service continues to make significant revenue contributions, particularly in the third quarter of 2024. Google Cloud generated $11.35 billion in revenue, reflecting a 35% rise from September 2023. Revenue from YouTube advertisements grew to $8.921 billion, a 12.2% increase from the same period last year.

Meta remains a dominant force in the social media and digital advertising sectors. According to Meta’s most recent quarterly report, it experienced a significant 19% increase in revenue, followed by $15.69 billion in net income, reflecting a 35% increase from last year.

AI leader Nvidia positioned itself as the go-to provider of GPU technology. Its revenue increased 122.35% from $13.51 billion in the same period in 2023 to $30.04 billion in 2024. Net income surged 168.17% from $6.19 billion in the same period in 2023 to $16.6 billion in 2024.

Tesla continues to push the boundaries of electric vehicles with solid growth, as the company’s revenue increased 7.85% from $23.35 billion in 2023 to $25.18 billion in 2024, with a 16.95% net income increase from $1.85 billion in 2023 to $2.62 billion in 2024.

Despite the Magnificent Seven stocks performing exceptionally well and driving much of the market’s growth, some of their stock prices might be considered overvalued by traditional valuation metrics.

“We use a lot of these technologies and we’re finding many novel use cases for this type of technology, and it’s clear that it’s going to be a big deal, but maybe the markets rated these multiples a little too aggressively,” Head of Macro Strategy at Capital Fund Management  Christian Dery told Yahoo Finance.