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The Magnificent Seven stocks are crucial components of the S&P 500 and the Nasdaq 100, exerting significant influence on the stock market’s performance.
While the term “Magnificent Seven” is a recent moniker, the underlying companies are not strangers to investors. Previously, the market was abuzz with the likes of FANG and FAANG stocks, with several FAANG members now part of this elite group.
Business landscapes evolve over time, impacting the investment landscape for stakeholders. While some former growth leaders have faltered, three stalwarts within the Magnificent Seven cohort continue to deliver robust returns, poised for future growth. Here are the top Magnificent 7 stocks to consider for investment in April.
Microsoft (MSFT)
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Microsoft (NASDAQ:MSFT) has emerged as a powerhouse in the artificial intelligence (AI) realm, rivalling the likes of Nvidia (NASDAQ:NVDA). While Nvidia focuses on chip production, Microsoft has strategically diversified through acquisitions and investments, deftly navigating regulatory hurdles.
Expanding beyond AI, Microsoft’s recent acquisition of Activision bolsters its gaming division, anchored by the Xbox brand. Despite its gaming success, cloud computing remains Microsoft’s primary revenue driver.
Microsoft’s Cloud revenue soared by 24% year-over-year (YoY) in the second quarter of fiscal year 2024, contributing $33.7 billion to the quarter’s $62.0 billion revenue. The company posted an 18% YoY revenue increase, with net income climbing 33% YoY, elevating profit margins to 35.3%.
As the largest publicly traded corporation, Microsoft boasts impressive long-term returns, surging 245% over five years and already marking a 12% increase year-to-date.
Nvidia (NVDA)
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Nvidia stands out as another high-flying stock set to extend its bullish run. The company’s GPU chips continue to secure market dominance, firmly placing it ahead of its rivals.
Nvidia’s exceptional financial growth in the fourth quarter of fiscal 2024 is unparalleled, boasting 265% YoY revenue surge and a staggering 769% YoY net income spike.
While AI sector expansion may moderate, Nvidia remains primed for steady growth in the coming years. Although sustained triple-digit growth rates are unsustainable, the stock, presently trading at a 36-forward P/E ratio, has surged 74% year-to-date.
Significant margin expansion post-AI boom underscores Nvidia’s stellar performance, with a reported 55.6% net profit margin at the close of the fourth quarter in fiscal 2024. Earnings and revenue growth rates from that period have outpaced the stock’s gains over the past year.
Alphabet (GOOG, GOOGL)
The Rise and Shine of Alphabet Inc. and Google – A Bright Tomorrow for Investors
A Digital Empire
Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL) stands tall at the zenith of the digital realm. It reigns supreme with the world’s most extensive online advertising network. The convenience of Google’s search engine has become second nature to many, even masquerading as a trusted research accomplice.
The Ad Game Mastery
Click by click, Alphabet has mastered the art of online advertisements, tailoring them precisely to suit the user’s search queries. Once a business dabbles in the realm of Google or YouTube Ads, disentangling becomes a daunting task. Turning off ad campaigns equates to forsaking the steady stream of leads and sales these ads effortlessly generate.
Financial Fortitude and Market Expansion
In the annals of the fourth quarter of 2023, Alphabet’s advertising segment continued its triumphant crescendo, welcoming a 13% year-over-year revenue surge. While the narrative often revolves around ads, Google Cloud has stealthily been usurping a more substantial slice of the cloud computing pie. The cloud division’s profit margins are on the ascendant, paving the way for Alphabet’s 52% year-over-year net income surge.
Market Success and Growth Trajectory
Alphabet’s stocks have metamorphosed, a testament to their resplendent performance. Over the past half-decade, the stock has soared by a dazzling 152%, enchanting investors. The ripples of this success story continue as the year unfurls, with a solid 9% increment year-to-date.
