My 2 Favorite Discount "Magnificent Seven" Stocks to Buy Now

2 months ago 31

Adria Cimino, The Motley Fool

Wed, July 22, 2026 astatine 11:30 AM CDT 3 min read

The "Magnificent Seven" tech stocks led the S&P 500 higher successful caller years amid excitement astir their engagement successful the high-growth tract of artificial quality (AI). But implicit the past respective months, galore of these players person mislaid immoderate momentum -- and this has brought down their valuations.

For the strongest of companies, I spot this arsenic a impermanent determination arsenic the semipermanent AI communicative remains intact. And that means close present is an fantabulous clip to spell bargain hunting and prime up shares of my 2 favourite discount "Magnificent Seven" stocks: Nvidia (NASDAQ: NVDA) and Microsoft (NASDAQ: MSFT).

Missed Nvidia successful 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" awesome flashed for a little-known chipmaker called Nvidia. For the archetypal clip successful years, that aforesaid "Total Conviction" awesome is flashing for a institution 1/100th the size of Nvidia. Continue »

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1. Nvidia

Nvidia dominates the AI spot market, selling the graphics processing units (GPUs) that powerfulness important AI tasks. This has propelled the institution to grounds gross levels and double- and triple-digit maturation successful caller years. In the latest afloat year, for example, gross climbed 65% to $215 billion.

The tech elephantine besides has maintained precocious profitability connected income -- gross borderline has exceeded 70% 4th aft 4th implicit the past mates of years.

Meanwhile, Nvidia's committedness to innovation should support it up of rivals. Nvidia has pledged to motorboat spot oregon strategy updates connected an yearly basis, and the adjacent 1 is conscionable ahead. The institution is connected way to vessel the Vera Rubin strategy aboriginal this year. At the aforesaid time, it's important to enactment that companies crossed the AI marketplace person steadily spoken of beardown demand, truthful the wide situation looks bright.

All of this means Nvidia is simply a astute bargain contiguous astatine 22x guardant net estimates.

2. Microsoft

Microsoft banal has struggled successful caller times arsenic investors disquieted that advancements successful AI could regenerate software. But I don't deliberation this volition happen, astatine slightest not to a large extent. While AI whitethorn regenerate definite software, it's improbable to upset platforms that are profoundly integrated into companies' operations -- similar Microsoft's offerings.

It's besides important to enactment that Microsoft has incorporated AI into its bundle suite -- you whitethorn beryllium acquainted with Copilot -- truthful arsenic AI's capabilities advance, Microsoft's bundle besides should benefit.

At the aforesaid time, Microsoft's unreality concern offers its customers a assortment of AI products and services, and this is driving tremendous growth. In the caller quarter, the AI concern reached yearly recurring gross of $37 billion. So AI has been a large accidental for Microsoft, and this is apt to proceed arsenic AI is much often applied to real-world problems.

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