A Closer Look at the Magnificent Seven: One Stock to Buy and One to Steer Clear Of

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### Key Facts

Microsoft’s stock rose 9.5% in after-hours trading on July 29, following the release of its fiscal 2026 fourth-quarter results, despite a year-to-date decline of 17.4%. The company reported that its cloud platform Azure surpassed $100 billion in revenue for the first time and total Microsoft Cloud revenue increased by 27% year over year to $214 billion. Additionally, Microsoft 365 Copilot doubled its paid seats to 30 million.

In contrast, Tesla reported a 26% year-over-year revenue increase to $28.2 billion for Q2, delivering a record 480,216 vehicles, an increase of 25% YOY. However, its operating income fell by 57% YOY, and free cash flow turned negative at -$1.09 billion. Tesla’s capital expenditures for Q2 were $5.79 billion, up 142% from the previous year, leading to concerns about its valuation as it trades at 277 times its earnings.

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