The “Magnificent Seven” stocks have emerged as symbols of innovation and adaptability, thriving even in the face of economic headwinds. Together, this elite group represents a significant portion of the S&P 500 Index ($SPX), underscoring their outsized influence on the broader market. These tech giants have not only weathered economic storms but also spearheaded the artificial intelligence (AI) revolution, leveraging cutting-edge technology to redefine industries and generate unparalleled growth.
In fact, AI has become the defining force behind their success, fueling breakthroughs and creating opportunities that were once the stuff of science fiction. Whether it's building smarter systems, revolutionizing consumer experiences, or streamlining operations across sectors, these companies have unlocked new dimensions of growth by embracing AI at their core.
Against this backdrop, here’s a closer look at three stand-out Magnificent Seven players: Nvidia (NVDA), Microsoft (MSFT), and Amazon (AMZN). These tech giants continue to captivate Wall Street with their innovative prowess. Plus, their mean price targets signal that further upside remains on the horizon.
Stock #1: Nvidia
Nvidia has transformed itself from a PC graphics pioneer into a global leader in AI-powered innovation. Renowned for its cutting-edge GPUs, Nvidia's technology fuels breakthroughs in high-performance computing, gaming, and virtual reality. The company continues to redefine its legacy, achieving remarkable milestones this year.
From shattering record highs to earning a coveted spot in the Dow Jones Industrial Average ($DOWI), the chipmaking titan recently briefly claimed the title of the world's most valuable company, surpassing Apple (AAPL). Presently valued at a massive market cap of $3.4 trillion, shares of Nvidia have rallied almost 192.2% over the past year and 180.3% on a YTD basis, easily dwarfing the broader S&P 500 Index’s ($SPX) 31.5% annual growth and 27% YTD gains.
Beyond its meteoric stock performance, Nvidia also delivers value to shareholders through dividends. In its latest earnings release, the company declared a quarterly dividend of $0.01 per share, payable on Dec. 27. Its forward annualized dividend of $0.04 per share offers a yield of 0.03%.
The chip giant released its fiscal 2025 third-quarter earnings report on Nov. 20, which blew past both Wall Street’s top and bottom lines forecasts. Nvidia reported record revenue of $35.1 billion, reflecting a 94% year-over-year jump that comfortably exceeded Wall Street’s forecast of $33.1 billion. On an adjusted basis, the company’s earnings of $0.81 per share showed a 103% annual jump, soaring beyond the Street’s projection by 8.6%.
Driving Nvidia's record-breaking top-line performance is its data center division, which includes the company's sales of AI processors and related components. The segment delivered an astounding $30.8 billion in revenue, marking 112% year-over-year growth and underscoring Nvidia’s leadership in the AI revolution.
While reflecting on the Q3 performance, CEO Jensen Huang emphasized that the "age of AI" is in full force, driving a worldwide transition to Nvidia-powered computing. He highlighted the soaring demand for Hopper GPUs and the growing excitement for Blackwell’s full-scale production.
Looking forward to Q4 of fiscal 2025, management anticipates revenue to hit $37.5 billion, with a slight variance of 2%. Meanwhile, gross margins are projected at 73% on a GAAP basis and 73.5% on a non-GAAP basis, each with a 50-basis-point flexibility. Meanwhile, analysts tracking Nvidia expect the company’s bottom line to rise a remarkable 134% year over year to $2.76 per share in fiscal 2025 and rise another 41.3% to $3.90 per share in fiscal 2026.
Wall Street appears highly optimistic about NVDA stock, with a consensus “Strong Buy” rating overall. Of the 43 analysts offering recommendations, 36 advise a “Strong Buy,” three give a “Moderate Buy,” and the remaining four suggest a “Hold.”
The average analyst price target of $173.71 indicates 25.1% potential upside from the current price levels, while the Street-high price target of $220 suggests that NVDA could rally as much as 58.5% from here.
Stock #2: Microsoft
With a hefty market cap of $3.3 trillion, Microsoft stands as a tech powerhouse shaping the future. Renowned for staples like Microsoft Office and Teams, the Washington-based giant has taken its innovation to new heights by supercharging its AI investments. From Windows and Xbox to Microsoft 365, Teams, and Azure AI, Microsoft embeds cutting-edge AI into its ecosystem, delivering billions of intelligent experiences daily and redefining how the world works and connects.
Shares of this mega-cap stock are up nearly 19.2% over the past year and 18.6% on a YTD basis.
Microsoft remains deeply focused on creating shareholder value, returning approximately $9 billion in fiscal 2025 Q1 alone through a blend of share repurchases and dividends. With an impressive streak of 20 consecutive years of dividend growth, the company continues to reward investors, offering an annualized dividend of $3.08 per share, which equates to a modest 0.69% yield.
Microsoft exceeded expectations with its impressive fiscal 2025 Q1 earnings report on Oct. 30. The tech giant posted a 16% year-over-year revenue surge, reaching $65.6 billion, slightly surpassing estimates. Its EPS of $3.30 marked a 10% increase from the previous year, beating projections by 6.1%. Meanwhile, Microsoft’s commercial cloud business continued to soar, with revenue climbing 22% annually to $38.9 billion, highlighting the company’s strong momentum in the digital space.
Revenue from the company's Intelligent Cloud segment, which includes its Azure business, jumped 20% year over year to $24.1 billion, propelled by the increasing demand for Azure and other cloud offerings. CEO Satya Nadella emphasized the sweeping impact of AI, noting its power to transform roles, workflows, and business processes across the board.
Nadella highlighted how Microsoft is seizing new opportunities and attracting customers by enabling them to leverage the company’s AI platforms and tools to unlock growth and enhance operational efficiency. During the Q1 earnings call, Microsoft’s management highlighted Azure as a key growth driver in the Intelligent Cloud segment, with a forecast 31% to 32% revenue increase in Q2, fueled by strong demand for cloud services.
Microsoft also anticipates adding more dollars to Azure in Q2 than in any other quarter to date, reinforcing its position as a leader in cloud transformation and AI innovation. Analysts tracking Microsoft project the company’s profit to increase 9.6% year over year to $12.93 per share in fiscal 2025 and grow another 14.3% to $14.78 per share in fiscal 2026.
Microsoft stock has a consensus “Strong Buy” rating overall. Out of the 40 analysts covering the stock, 34 recommend a “Strong Buy,” three suggest a “Moderate Buy,” and the remaining three give a “Hold” rating.
The average analyst price target of $504.45 indicates potential upside of 13.1% from the current price levels. However, the Street-high price target of $600 suggests that the stock could rally as much as 34.5%.
Stock #3: Amazon
Amazon has significantly broadened its scope in recent years. Once synonymous with online shopping, Amazon has expanded into entertainment with offerings like Amazon Prime Video, Music, Prime Gaming, and Twitch, highlighting its extensive influence. The company has also made notable strides in cloud computing and AI through its Amazon Web Services (AWS) division, capitalizing on the surging demand for cloud solutions and AI technologies.
With a strong market cap of almost $2.4 trillion, shares of this retail giant have outperformed the broader market, delivering gains of roughly 53% over the past 52 weeks and 47.5% on a YTD basis.
After Amazon released its Q3 earnings report on Oct. 31, which exceeded Wall Street’s expectations for both top and bottom lines, shares of the retail giant surged more than 6% in the following trading session. Net sales for the quarter rose 11% year-over-year to $158.9 billion, slightly surpassing the forecast $157.3 billion. Earnings per share also saw a significant jump, soaring 49.4% year over year to $1.43, surpassing estimates by an impressive 25.4% margin.
Amazon’s growth story remains impressive, with strong sales across its key segments. The North American division saw a solid 9% year-over-year increase, bringing in an impressive $95.5 billion. Its international business also thrived, with a 12% annual boost to $35.9 billion. Yet, it was the AWS division that truly stood out, driving a robust 19% annual growth and contributing a remarkable $27.5 billion in revenue.
This surge solidifies AWS' leadership in the booming cloud and AI markets, strengthening Amazon's position as a dominant player in the global tech arena. In addition, the company's operating income soared by an impressive 56% year over year, reaching $17.4 billion, proof of Amazon's unwavering commitment to efficiency and cost management.
As of Sept. 30, Amazon’s free cash flow reached an impressive $47.7 billion, up from $21.4 billion during the same period last year, highlighting its strengthened financial position and robust cash generation capabilities. Looking ahead to Q4, the company expects net sales to fall between $181.5 billion and $188.5 billion, reflecting a year-over-year growth of 7% to 11%. Additionally, operating income is forecasted to range between $16 billion and $20 billion, compared to $13.2 billion in Q4 of fiscal 2023.
Analysts tracking Amazon expect the company’s earnings to climb a stunning 86.3% year over year to $5.29 per share in fiscal 2024 and rise another 17.4% to $6.21 per share in fiscal 2025.
Overall, Wall Street appears bullish about AMZN stock, with a consensus “Strong Buy” rating. Of the 49 analysts offering recommendations, 45 advise a “Strong Buy,” three give a “Moderate Buy,” and the remaining one suggests a “Hold.”
The average analyst price target of $237.22 indicates only 5% potential upside from the current price levels, while the Street-high price target of $285 suggests that AMZN could rally as much as 26.1% from here.
