Best Magnificent 7 Stock to Buy Now: Full Analysis
Finding the best Magnificent 7 stock to buy in 2025 requires careful analysis, especially given recent market performance. Much has been said about how the Magnificent 7 has lost its luster this year. Well, let’s see if that is true – fortunately, courtesy of CNBC, there is a Magnificent 7 Index:
The Magnificent 7 Index, down 14.5% YTD, is shown in solid blue. The S&P 500 Index, shown in violet, is down 6.2% YTD. Thus, the Magnificent 7 Index seems to have been down more than double the market correction since the beginning of the year.
Long-Term Performance: A More Complete Picture
However, comparisons over the scope of a few months may not be fair. Let’s take a look at the last 12 months:
Over the last year, the Magnificent 7 Index is up 19% (solid blue) and S&P500 (violet line) is up 8%. Not so bad at all. Clearly, the underperformance in 2025 is a concern, but the underperformance may just be a temporary phenomenon. Finally, let’s take an even longer view:
CNBC created the Magnificent 7 Index in October 2022. Since that date, the index is up 191% while the S&P500 is up 44%. Yes, the Magnificent 7 has been, well, Magnificent over those 30 months. That is why they were dubbed the Magnificent 7 to begin with.
Best Magnificent 7 Stock to Buy: Valuation Analysis
But enough with price performances. Let’s move towards valuations:
| Name | Sector | 2025 Forward PE | Expected Future E Growth | 2026 PE Ratio | 2027 PE Ratio | 2028 PE Ratio |
| SPY | 24,23 | 12,34% | 21,57 | 19,20 | 17,09 | |
| XLK | Technology | 25,18 | 16,54% | 21,61 | 18,54 | 15,91 |
| AAPL | Technology | 29,01 | 8,87% | 26,37 | 23,87 | 20,30 |
| AMZN | Consumer Discretionary | 30,12 | 18,72% | 25,19 | 20,28 | 17,51 |
| GOOG | Technology | 16,85 | 13,38% | 15,73 | 13,74 | 11,87 |
| META | Communications | 22,2 | 10,47% | 19,37 | 16,66 | 15,27 |
| MSFT | Technology | 29,72 | 14,21% | 26,16 | 22,34 | 19,67 |
| NVDA | Technology | 24,63 | 29,64% | 19,16 | 16,64 | 14,45 |
| TSLA | Consumer Discretionary | 148,96 | 20,97% | 96,60 | 75,26 | 49,62 |
A few words on how we arrived at those valuations: The valuations for XLK and SPY are taken from the issuer’s website, State Street Global Advisors. The valuations for the Magnificent 7 stocks are taken from seekingalpha.com.
Our analysis shows that while the Magnificent 7 has delivered exceptional returns over the last 30 months, their current valuations are concerning for investors seeking the best Magnificent 7 stock.
When compared to the valuations of the SPY ETF (S&P 500 Index) and XLK ETF (S&P500 Technology Index), most of the stocks appear expensive or, at the very least, fully valued. The notable exceptions in this valuation landscape are GOOGL, NVDA, and, to a degree, META.
Best Magnificent 7 Stock to Buy: Valuation Analysis
Valuations, however, are not everything. Let’s take a look at Wall Street analysts’ price estimates:
| Low Estimate Upside | Average Estimate Upside | High Estimate Upside | |
| AAPL | -21,4% | 12,50% | 42,80% |
| AMZN | 4,3% | 30,50% | 53,48% |
| GOOG | 0% | 29,2% | 50,00% |
| META | -18,2% | 22,20% | 31,69% |
| MSFT | 6,4% | 25,40% | 66,67% |
| NVDA | 6,5% | 51% | 103,70% |
| TSLA | -59,6% | 1% | 63,16% |
Just a quick explanation of how we use this data. In general, we would like a stock average price estimate to be at least 20% -25 %. However, the average is not enough. Ideally, we would like the lowest price estimate to be ABOVE the current price.
Clearly, AAPL, META and TSLA do not fulfill this criteria. Out of the remaining four we can rank them in order of attractiveness – NVDA, AMZN, GOOG and MSFT. Our readers can see for themselves but NVDA just stands out in that group as the cheapest valuation-wise and most highly thought of stock in the Magnificent 7.
Short Interest Analysis: Are Investors Betting Against Tech Giants?
Finally, let’s look at short float:
| Ticker | Short Float |
| AAPL | 0,75% |
| AMZN | 0,75% |
| GOOG | 1,18% |
| META | 1,45% |
| MSFT | 0,70% |
| NVDA | 1,12% |
| TSLA | 2,90% |
There are really no big conclusions we can draw here. In general, short float less then 5% is just an indication that most investors do not anticipate negative developments for the companies. Clearly, we would prefer that short float be significantly lower than even the 5% target and this is indeed the case for most of the companies in the Index but especially the four we are interest in – NVDA, AMZN, GOOG and MSFT.
Comparing Magnificent 7 Stocks Before April 30 Earnings
Finally, we are going to the action for this week. Since there are four Magnificent 7 stocks that are reporting this week – AAPL, AMZN, MSFT and META we will look at the seasonality of the 2 stocks we are interested to buy ahead of earnings – MSFT and AMZN. It turns out that AMZN is quite volatile! Out of the last 20 earnings dates AMZN missed 4 times and the average miss was 30%, while the average beat was in excess of 50%… It is just too volatile to buy AMZN ahead of earnings.
MSFT is quite the different story – the company has beaten earnings 19 out of the last 20 times. The average beat was around 5% while the miss was only by 2%.
Yes, MSFT is the stock to buy ahead of its earnings on 30 April 2025. Yes, earnings can be volatile and unpredictable but MSFT’s earnings seem to be really not that volatile. With valuation so depressed, even just matching expectations could be a catalyst for the stock to go much higher.