The ‘Magnificent 7’ continues to stamp its authority on the stock market, capitalizing on the artificial intelligence (AI) boom. Moreover, a recent Deutsche Bank report underscores their potential, showing that their financial power surpasses that of nearly every major country. Additionally, these powerful stocks to buy are predicted to grow at an annual rate of 12% through 2026, significantly outperforming the S&P 500’s broader 3% growth estimate for the 493 other companies. This contrast emphasizes their dominant market position and key role in shaping investment strategies and the global economic environment. Hence, with their massive impact and bellwether positioning in the stock market, these stocks are must-haves in any forward-thinking portfolio. Here are three stocks from the ‘Magnificent 7’ list that investors must buy.
Stocks to Buy: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) continues to dazzle, with its shares soaring 68.8% over the past year. These advancements are mainly attributed to its strides in AI, as it continues to build on its dominance in the field.
The company has effectively layered AI into its ubiquitous software, adding several new chapters to its growth story. Embedding AI into its core products, such as Microsoft 365 Copilot and its AI-enhanced Surface devices, signals MSFT’s clear commitment to an AI-driven future.
However, Microsoft’s ambition goes beyond merely integrating AI into its products, as the company aims to spearhead a revolution. Its recent partnership with the media platform Semafor supports the notion that it seeks to revolutionize journalism through the innovative application of AI technologies.
Financially, MSFT shines with a staggering $62.02 billion revenue, increasing 17.5% year-over-year (YOY) and EPS of $2.93, exceeding expectations by 16 cents. Subsequently, with Tipranks analysts assigning MSFT a ‘strong buy’ rating, predicting a 12.92% upside, Microsoft’s trajectory is one of relentless innovation and expansion, promising an exciting future.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) wrapped up another year with aplomb, delivering a stellar financial performance, which underscores its stellar trajectory. The firm’s operating profit nearly tripled to a staggering $36.9 billion as its business pivots towards high-margin ventures, including Amazon Web Services and advertising. Moreover, it is looking to effectively layer its cloud-based services and AI endeavors with projects such as ‘Olympus,’ a large language model, and Amazon Q, a chatbot for content creation and task streamlining. The goal is to strengthen AWS and advance the company’s position in the generative AI space.
Furthermore, AMZN’s financials stand out, delivering $170 billion in sales during its most recent quarter, beating estimates by $3.70 billion, rising 14% YOY. Also, its EPS of $1 per share beat estimates by 20 cents. With Tipranks analysts giving Amazon a ‘strong buy’ rating and a 15.75% upside potential, it offers investors a promising avenue for growth.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is at the forefront of the metaverse’s transformation, driving the future of virtual and augmented realities. Its investments in innovative technologies, such as Ray-Ban smart glasses and Oculus VR headsets, underscore its commitment to shaping the infrastructure of spatial computing. Moreover, Meta’s strategic venture into AI with an $800 million data center in Indiana indicates its plans to lead in AI, equipped with cutting-edge liquid-cooling hardware, which should be ready for commercial release by 2026.
Financially, Meta’s trajectory is impressive, with shares soaring by 189.8% over the past year. The company’s fourth-quarter financials further solidify its standing, reporting GAAP EPS of $5.33, outperforming estimates by 39 cents. A 24.7% increase in YOY revenue to $40.1 billion, surpassing forecasts by $940 million, reflects robust growth and market confidence. TipRanks analysts also view Meta optimistically, awarding it a ‘strong buy’ rating with a 5.28% upside. This confidence in Meta cements its position as a top-tier player in the AI space.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.