Amazon and Microsoft are at the top of their games, while Alphabet and Tesla face challenging hurdles.
Key Points
After big gains in 2023, many of the 'Magnificent Seven' stocks have cooled off in 2024. Alphabet, Amazon, Microsoft, and Tesla all lag the major indexes through the end of August. Each has the potential to reward patient shareholders, but one stands out as the best overall buy.
Alphabet isn't as cheap as it seems
Alphabet is trading like a value stock rather than a growth stock. It is the cheapest Magnificent Seven stock based on analysts' earnings estimates. Its business spans search, media, software, hardware, and more, but it faces threats from competitors like OpenAI.
Investors have waited a long time for this version of Amazon
AWS remains Amazon's crown jewel and a leader in cloud infrastructure. The company has recently turned around its e-commerce business and is reporting solid earnings growth, but it still focuses primarily on growth over profitability.
Tesla is in 'prove it' mode
Tesla is the only Magnificent Seven stock that is down in 2024, facing challenges from the slowing adoption of EVs and increasing competition in the auto industry. Despite these challenges, it has significant growth potential.
Microsoft is a balanced buy
Microsoft stands out as a better buy than Alphabet, Amazon, or Tesla due to its established position and clear monetization strategies, particularly in AI. Microsoft has a strong record of stock buybacks and dividend growth.
