Aggressive U.S. tariffs have seemed to hurt the so-called “Magnificent Seven” mega-cap tech companies less than their smaller counterparts in the benchmark S&P 500, according to analysts at Jefferies.

In a note to clients on Thursday, the analysts said that even though roughly 76% of S&P 500 firms have beaten profit per share forecasts during the ongoing quarterly earnings season, these stocks have largely “failed to outperform”.

This may be an indication that investors were concerned that financial outlooks have been either “weak” or “uncertain”, the analysts added.

“Stock performance following the results has been lacklustre, with stocks not outperforming even when they beat expectations, while misses were heavily penalised. Furthermore, beats led to marginal earnings per share upgrades, while misses drove substantial cuts,” they wrote.

Several businesses have flagged that murkiness around President Donald Trump’s punishing — and now partially delayed — levies on friends and adversaries alike have made it more difficult to plan out future investment decisions.

Recent data has also shown that the U.S. economy contracted in the first quarter, although consumer spending and the overall jobs market has remained somewhat resilient.

Research from Jefferies showed that “tariffs” were mentioned over 4,000 times in post-earnings analyst calls at “some 300-odd” S&P 500 companies, with most of the remarks coming from executives in sectors like durables and discretionary retail. Industries with the fewest mentions of tariffs were consumer services, software, and media, Jefferies said.

Large- and mid-cap firms have made up 75% of the earnings beats, while only 68% have so far come from small- and micro-cap groups, the Jefferies analysts flagged. Against this backdrop, the latest results season has been “good” for Magnificent Seven names, which include Nvidia (NASDAQ:NVDA), Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA), and Apple (NASDAQ:AAPL), they noted.

“Thanks to Alphabet and, to some extent, Microsoft, the 2025 fiscal year earnings per share estimate for Magnificent Seven recovered following the results. In contrast, S&P 493 continued to see further cuts to this year’s estimates,” the brokerage said.

Consensus expectations now see the Magnificent Seven’s per-share profit growth this year at 16%, above a projected uptick of 7% for the other 493 companies in the S&P 500.

The gap between the two groups is “significant”, the analysts said, adding that this could expand again if earnings revisions continue to favor Magnificent Seven companies.