Three Magnificent Seven Stocks Poised for Long‑Term Growth

Key Points

• The Magnificent Seven represent core holdings for many investors. Their substantial earnings power and strong investor interest make them essential components of large‑cap portfolios.

• The most recent Hazeltree Crowding Report, which monitors institutional holdings, shows that six of the seven Magnificent Seven stocks — excluding Tesla — ranked among the top ten most‑held long positions in May.

• Meta has a forward P/E ratio of just 18.

The Magnificent Seven represent core positions in many portfolios. Their substantial earnings power and strong investor interest make them essential components of large‑cap portfolios.

In the latest Hazeltree Crowding Report, which tracks which stocks institutional investors are holding, six of the seven Magnificent Seven — excluding Tesla — were among the top 10 most popular long positions in May.

But among these, three stand out as particularly attractive at present: Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT)and Meta (NASDAQ: META).

Image source: Getty Images.

1. Nvidia

All three companies share a common characteristic: they are currently priced at a notable discount.

Nvidia is presently valued at 23 times forward earnings, a decline from 40 a year earlier. Its long‑term valuation appears especially appealing, with a five‑year PEG ratio of just 0.63. A PEG below 1 indicates that the stock is undervalued relative to its projected earnings growth, and the lower the ratio, the greater the discount.

This underscores Nvidia’s strong buy case, driven by robust earnings momentum. In the latest quarter, revenue rose 20% sequentially and 85% year‑over‑year, while earnings jumped 214% year‑over‑year. For the current quarter, the company projects revenue of $91 billion, representing an 11% increase from the prior quarter, with a gross margin of 74.9%, marginally down from 75%.

Looking ahead, analysts forecast 88% earnings growth for the current fiscal year, projecting earnings of $8.96 per share. For the subsequent fiscal year — 2028 — Wall Street expects a 42% increase in earnings.

Analysts set a median price target of $300 per share for Nvidia, implying a potential 44% upside over the next 12 months.

2. Microsoft

Microsoft’s stock has underperformed this year, posting a 21% decline year‑to‑date. The drop reflects a combination of factors, such as its previously elevated valuation, concerns over AI spending, uncertainties surrounding OpenAI’s profitability, modest slowdown in AI‑cloud growth, and other market pressures.

However, many of these concerns are short‑term in nature. In the most recent quarter, Microsoft delivered blowout earnings that surpassed expectations, thereby mitigating several of the earlier worries. Notably, cloud revenue grew 29% year‑over‑year, and Azure AI sales increased 40%. Additionally, the company restructured its partnership with OpenAI, ending the exclusive provider status and the associated revenue‑share arrangement.

Moreover, Microsoft projects double‑digit revenue growth for the fiscal year, with an expected 5% sequential increase in sales for the current quarter. Azure sales are projected to rise 40% year‑over‑year in the current quarter and are expected to accelerate during the second half of 2026.

The key advantage is Microsoft’s attractively low valuation, with a forward earnings multiple of approximately 19 — near a decade‑low.

Consequently, Microsoft stock presents a compelling buy opportunity at this time.

3. Meta Platforms

Meta has faced recent challenges, with its share price declining after a Financial Times report suggested the company was raising capital for AI initiatives — a move that Meta officials described as ‘pure speculation.’

The stock also fell about 5% recently after news that a senior executive overseeing AI implementation was departing the firm.

Overall, Meta’s share price is down 13% year‑to‑date, yet it remains exceptionally inexpensive, trading at 18 times forward earnings with a PEG ratio of 0.82.

Such a valuation is remarkably low for a company of its size and success. In its latest earnings report, revenue increased 33% and earnings rose 62%, with analysts expecting 7% sequential revenue growth in the current quarter.

Investors should monitor rising expenses, as Meta projects a 41% increase in spending to roughly $165.5 billion at the midpoint of its fiscal‑year guidance. Capital expenditures have been raised to a range of $125 billion–$145 billion, up from $115 billion–$135 billion, to support AI‑focused data‑center investments.

Nevertheless, the low valuation makes Meta an appealing opportunity. Analysts’ median price target of $808 per share implies roughly 43% upside, underscoring its status as a compelling buy.

Should you buy stock in Nvidia right now?

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