MW Is it time to load up again on the 'Magnificent Seven' stocks?
By Philip van Doorn
Also: How Nvidia stands out as a bargain stock, warnings for investors and a bitcoin-related IPO
Nvidia stands out among the so-called Magnificent Seven stocks, with a forward price/earnings ratio only slightly higher than that of the S&P 500, but with a projected revenue growth rate more than five times as high as that of the index, based on estimates among analysts polled by LSEG.
So far this year, the S&P 500 has returned 1.1% with dividends reinvested. Here is how the 11 sectors of the index have performed:
The information technology sector has been the laggard among the 11 sectors of the S&P 500 so far this year.
Since the end of October, the S&P 500 information-technology sector has declined by 6.3%, also with dividends reinvested.
After several years of dominance for the "Magnificent Seven" group of stocks - Nvidia (NVDA), Apple $(AAPL)$, Microsoft $(MSFT)$, Amazon.com (AMZN), Alphabet $(GOOGL)$, Meta Platforms (META) and Tesla $(TSLA)$ - you might not think much of the recent pullback for Big Tech. But Christine Ji and Joseph Adinolfi explained how the market rotation had lowered relative valuations for tech stocks, interviewing three professional investors who believe that it is time for investors to resume buying the Magnificent Seven.
More coverage of tech and related stocks:
-- AMD's stock is on a hot streak not seen in six years
-- Meta's stock is trading at a stark discount to Alphabet's. Why analysts see a prime buying opportunity.
-- These fintech stocks could be big winners from Trump's 'populism' push, according to Citi
-- Micron's business is so hot that profits could quadruple in just two years, says this analyst
How Nvidia stands out
This table shows price changes for the Magnificent Seven stocks, excluding dividends, since the end of October. It also shows how the companies' forward price/earnings ratios have changed since then. These are prices divided by rolling consensus 12-month earnings-per-share estimates among analysts polled by LSEG. The table is sorted by current forward P/E, ascending, with numbers for the S&P 500 SPX at the bottom. You might need to scroll the table or flip to landscape to see all of the data.
Company Price change from Oct. 31 through Jan. 22 Forward P/E Forward P/E as of Oct. 31 Two-year estimated revenue CAGR through 2027 Meta Platforms Inc. -0.1% 21.5 22.2 16.9% Nvidia Corp. -8.7% 23.2 32.3 41.0% Microsoft Corp. -12.9% 25.3 30.0 15.8% Amazon.com Inc. -4.0% 28.4 31.1 11.2% Alphabet Inc. 17.6% 29.0 25.5 13.4% Apple Inc. -8.1% 29.0 32.6 7.6% Tesla Inc. -1.6% 215.1 224.5 13.6% S&P 500 1.1% 22.2 23.3 7.4%
The right-most column of the table shows projected compound annual growth rates (CAGR) for the companies' revenue from 2025 through 2027. The sales estimates are adjusted to calendar years for companies (such as Nvidia and Apple) whose reporting periods don't match the calendar.
Meta has the lowest forward P/E among the group and is the only stock trading at a lower P/E than the S&P 500. Meta's projected revenue CAGR is more than twice as high as that of the S&P 500.
What stands out even more is that Nvidia's forward P/E has declined to 23.2 from 32.3 since the end of October. This has resulted in part from the share-price decline, but it also reflects an increase in the rolling 12-month EPS estimate.
Nvidia appears to be bargain-priced because it trades at a forward P/E that is only slightly higher than that of the S&P 500, while its projected revenue CAGR through 2027 is more than five times the projected revenue growth pace for the index.
Among all the companies in the S&P 500, only Broadcom $(AVGO)$ has a higher revenue CAGR projection through 2027 than that of Nvidia: 41.5%. Broadcom has a higher forward P/E of 28.8, which has come down from 36.6 at the end of October.
Stock market warnings and opportunities
Investors took a ride this week: A sharp decline for stocks on Tuesday was followed by an enthusiastic rebound on Wednesday. Isabel Wang and Joy Wiltermuth explained how that trading pattern contained a warning for investors.
For traders, Lawrence McMillan provided a technical analysis of how much the S&P 500 would have to decline to set up a longer bearish pattern, while offering specific stock options trading recommendations.
Jules Rimmer looked back at the long history of stock-market disruptions caused by political events to show how most of them have set up opportunities for investors.
Momentum stocks
Various momentum-based strategies have worked out well for investors over the years. Mark Hulbert looked at this phenomenon and listed 20 stocks he considers strong choices for momentum investors.
Here's a look at an international momentum strategy that has been a good performer while providing diversification for U.S. investors.
Why this cold snap will be different
It might be best to sit tight this weekend.
Claudia Assis explained why this weekend's expected cold snap will be especially difficult for the airline industry.
And Charles Passy offered his take on an airline-industry problem that has nothing to do with the weather.
Two retirement scenarios
In the Help Me Retire column, Alessandra Malito helped a 56-year-old reader who wondered if he could afford to retire at age 62. Here's what was missing from his calculations.
She also helped a man who is 75 and still working, but wants to retire now. This is how he might change his investment allocation and cover his expenses when he stops working.
A fascinating IPO
The price of bitcoin has declined 43% over the past six months. But BitGo, which has a large business providing custody and other services in the virtual currency space for more than 4,900 clients, still decided to go public this week.
Tomi Kilgore covered the initial public offering of BitGo $(BTGO)$, for which investors showed initial enthusiasm despite the decline in bitcoin's price (BTCUSD) over the past six months. BitGo provides several services, including custody, in the virtual-currency space. The IPO was priced at $18 a share. On Thursday, the first day of trading, its stock shot up as high as $24.50 before closing at $18.49. Early Friday, the shares traded as low as $17.25.
Read: Bitcoin sinks below $90K as large investors sell their holdings and haven seekers go elsewhere
According to its amended S-1 filing, the low end of BitGo's projection for total revenue for 2025 is $16 billion, increasing from $3.1 billion in 2024. Those numbers are on page 13 of the filing, and the expense numbers are almost as high. The company expects to be marginally profitable, at least for now. The company reported having more than 4,900 clients, with $104 billion in assets on its platform.
A one-day reaction among traders looking for quick gains is one thing, but BitGo has projected big numbers that might mean more to long-term investors who believe the virtual currency industry will continue to grow and that BitGo's expenses will come down over time.
The Moneyist says don't do it
The Moneyist doesn't mince words when people are about to make terrible financial decisions.
The week Quentin Fottrell - the Moneyist - answered questions from a woman whose husband felt compelled to cosign a big loan for his brother. Here is Fottrell's estimate of what such a loan might cost the cosigners.
More advice from the Moneyist:
-- My wealthy friend invited me to stay, but he doesn't need more 'stuff.' What do I get the man who has everything?
-- I need to spend $15K on my roof. Do I take it from my Roth IRA, 401(k), IRA or money-market account?
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-Philip van Doorn
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January 23, 2026 12:27 ET (17:27 GMT)
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