Top Three “Magnificent Seven” Stocks to Consider Buying Now
The Nasdaq has fallen into correction territory. Just as the renowned “Magnificent Seven” stocks drove the market upwards in the past, these same stocks are now contributing to the current downturn. The “Magnificent Seven” comprises seven leading technology companies: Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Apple, Meta Platforms, Microsoft, Nvidia (NASDAQ: NVDA), and Tesla. All of these companies are listed on the Nasdaq Stock exchange.
Let’s explore three of these “Magnificent Seven” stocks that might be wise investments during this dip.
Where to invest $1,000 right now? Our analyst team has unveiled what they consider the 10 best stocks to buy now. Learn More »
Nvidia: The AI Leader
Nvidia reigns as the dominant player in artificial intelligence (AI). Its graphics processing units (GPUs) form the essential backbone of AI infrastructure. Initially aimed at accelerating graphics rendering in video games, Nvidia later expanded its GPUs’ functionality through a versatile software platform.
These GPUs boast high-speed processing power, making them ideal for high-performance computing (HPC) and AI applications. Nvidia has established a significant competitive edge with its CUDA parallel computing platform, which has been in use for over a decade. This lengthy lead allowed developers to adapt to CUDA before rival Advanced Micro Devices launched its competing platform. Nvidia has further consolidated its software position with CUDA X, a set of microservices and libraries tailored for AI and HPC.
The company stands to gain the most from increasing investments in AI infrastructure. Major cloud computing companies are expanding AI data centers, driven by soaring demand. In fact, the top three cloud providers plan to allocate upwards of $250 billion toward AI-related capital expenditures (capex) this year.
Despite promising growth potential, Nvidia’s shares are currently appealing, trading at a forward price-to-earnings (P/E) ratio below 24, based on 2025 analyst estimates. Furthermore, its price/earnings-to-growth (PEG) ratio sits under 0.5, with PEG ratios below 1 signifying undervaluation.
Image source: Getty Images.
Amazon: A Cloud Powerhouse
Amazon is widely recognized as the leader in global e-commerce; however, its most profitable segment is Amazon Web Services (AWS), its cloud computing arm. As pioneers in the infrastructure-as-a-service model, AWS operates the largest cloud computing business globally.
AWS also represents Amazon’s fastest-growing segment, with revenue increasing by 19% last quarter. The company is benefiting from clients developing AI models and applications using its Bedrock and SageMaker services.
Bedrock enables clients to select various AI models to customize, while SageMaker facilitates training and deployment of these models. To address growing demand, Amazon plans to invest $100 billion in AI infrastructure this year. They have also developed their proprietary AI chip after licensing technology from Marvell, enhancing their cost advantage when used in conjunction with GPUs.
Meanwhile, Amazon’s e-commerce operations are thriving, leveraging AI to reduce costs, simplify listing processes for third parties, and improve product discoverability for customers. The company’s higher-margin sponsored ad business is also witnessing solid growth.
Consistent with its strategy of significant investments, Amazon is focusing heavily on AI. Nevertheless, the stock is trading at a low valuation for the first time in years, with a forward P/E ratio of 31.
Alphabet: Digital Advertising and Cloud Computing Giant
Like Amazon, Alphabet competes among the top three cloud computing providers through its Google Cloud unit. Cloud computing is characterized by high fixed costs, and Google Cloud recently reached a tipping point of profitability as the business has gained scale. This was evident in its Q4 results, where Google Cloud revenue surged by 30%, while operating income jumped by 142%.
Similar to AWS, Google Cloud is also reaping benefits from clients constructing their own AI models. The company has developed a custom AI chip that promises improved inference times and lower costs when used alongside GPUs.
Additionally, Alphabet excels in digital advertising. Google search holds the title of the top digital advertising platform worldwide by revenue, while Alphabet’s YouTube streaming service ranks as the most-watched video platform and the fourth-largest digital ad platform globally. Through AI, Alphabet is enhancing search results and providing “AI overviews” for users seeking information.
Notably, the company historically serves ads for only 20% of search queries, indicating a significant opportunity to generate new ad formats from its AI overviews.
Beyond these established market segments, Alphabet is also exploring innovations in quantum computing and autonomous driving. Although these sectors may take time to impact profitability, they hold strong long-term potential.
Currently, Alphabet’s stock trades at a forward P/E of just 18.5, making it a compelling opportunity in today’s market.
Should You Invest $1,000 in Nvidia Right Now?
Before purchasing shares in Nvidia, consider the following:
The Motley Fool Stock Advisor analyst team has recently identified their view on…
Ten Top Stocks for Investors—Nvidia Not on the List
Investors looking for promising opportunities should take note: Nvidia is not among the ten best stocks recommended for purchase right now. However, these selected stocks have the potential to yield significant returns over the coming years.
Referring back to April 15, 2005, when Nvidia made a similar list, if you had invested $1,000 at that time, it would have grown to an impressive $655,630! *
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook, and sister of Mark Zuckerberg, CEO of Meta Platforms, serves on The Motley Fool’s board. John Mackey, former CEO of Whole Foods Market, which is an Amazon subsidiary, also sits on the board. Furthermore, Suzanne Frey, an executive at Alphabet, is part of The Motley Fool’s board. Geoffrey Seiler holds positions in Alphabet. The Motley Fool has investments in and recommends companies including Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Oracle, and Tesla. The Motley Fool endorses Marvell Technology and also recommends the following trades: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
