The Magnificent Seven is a popular group of stocks that includes some of the world’s largest companies. In fact, every company in the Magnificent Seven is among the 10 largest listed stocks in the United States. It consists of:
-
Nvidia (NASDAQ:NVDA)
-
Apple (NASDAQ:AAPL)
-
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)
-
Microsoft (NASDAQ:MSFT)
-
Amazon (NASDAQ:AMZN)
-
Metaplatforms (NASDAQ:META)
-
Tesla (NASDAQ:TSLA)
These seven companies are long-term success stories, but the reality is that not everyone on this list is a good buy. The three that I think are the best buys are Nvidia, Alphabet, and Amazon. While the other four may have some investment advantages, these are the three that I believe will provide the best returns in the future, and that is what I am focusing on.
Did you miss “Act 1” of AI? Act 2 could be 15 times bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1,” the R&D phase. “Act 2” is the global rollout. Continue “
Nvidia
Nvidia is the largest company in the world, with a market capitalization of around $5.4 trillion. But there is one thing: I think it is roughly undervalued. While this may run counter to common assessments, the reality is that the AI arms race is only intensifying, and Nvidia estimates that the big five AI hyperscalers will spend $1.3 trillion in data center capex in 2027, up from nearly $800 billion in 2026. With Nvidia being the leading provider of compute units for AI, this is good news. bodes well, which is why it released revenue growth forecasts of 70% for 2027. That’s faster than any other. company in the Magnificent Seven from afar.
Furthermore, none of this is priced into the stock. Currently, Nvidia trades at just 14.4 times next year’s earnings.
NVDA PE Ratio (Forward 1y) data by YCharts
Right now, its price-to-earnings ratio is 29. If Nvidia meets analyst estimates and maintains its valuation of 29 times earnings, that indicates the stock will double by the end of Nvidia’s next fiscal year (ending January 2028). This is a major title advantage, and no other Magnificent Seven title can match it.
As a result, this is my first purchase from this group.
Alphabet and Amazon
Alphabet and Amazon are two companies spending heavily on AI data centers, but for good reason. Each of them operates a leading cloud computing provider, requiring an incredible amount of computing power to satisfy customer demand. Now is the time to capture market share, so that everyone is not afraid to spend big. This year, Amazon and Alphabet are spending $220 billion and $200 billion, respectively, on data center investments. Although Nvidia doesn’t specify who the big five AI hyperscalers are, Amazon and Alphabet easily fit into this classification.
Gn bussni
