Valuations of the Magnificent Seven Stocks Approaching Attractive Levels
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Should l Buy NVDA?
Source: Fool
- Valuations Near Market Average: The Magnificent Seven stocks trade at forward P/E ratios between 22 and 30, aligning closely with the S&P 500's 21.8, indicating that despite their strong performance, they are not overvalued, making them attractive for investors.
- Nvidia's Growth Potential: Nvidia is projected to see a 52% revenue increase in FY 2027, primarily driven by over $500 billion in capital expenditures planned by Amazon, Alphabet, and Meta for data centers in 2026, which will significantly boost orders for its computing units and further accelerate growth.
- Strong Performance from Microsoft: Following its Q2 FY 2026 earnings, Microsoft exceeded expectations with Azure's cloud platform achieving a 39% year-over-year growth, and despite a drop in stock price, this presents an excellent buying opportunity for investors, highlighting its critical role in the AI investment trend.
- Meta's Low Valuation: With a forward P/E of 22.2, Meta is undervalued despite a 22% revenue growth in Q4 2025 and projected growth rates of 25% and 17% for the next two years, suggesting that investors can capitalize on this low valuation to acquire shares of a company expected to outperform the market's typical growth rate.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
Current: 186.940
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Cohere Achieves $240M Annual Revenue in 2025, Surpassing Targets
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- Successful Fundraising: In August 2025, Cohere raised $500 million, valuing the company at $6.8 billion, with investors including AMD, Nvidia, and Salesforce, reflecting market recognition of its capital-efficient model and strengthening its position in the competitive AI landscape.
- Improved Gross Margins: Cohere's gross margins averaged about 70% in 2025, expanding by 25 basis points year-over-year, demonstrating the company's ability to achieve sustainable growth by optimizing resource allocation and managing customer demand without being affected by market volatility.
- Market Expansion Plans: Cohere plans to continue expanding into the European market in 2026 and build its AI agent platform, North, anticipating another year of rapid growth, with the CEO indicating that the company is poised for a public market debut to attract more investor interest.
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Valuations of the Magnificent Seven Stocks Approaching Attractive Levels
- Valuations Near Market Average: The Magnificent Seven stocks trade at forward P/E ratios between 22 and 30, aligning closely with the S&P 500's 21.8, indicating that despite their strong performance, they are not overvalued, making them attractive for investors.
- Nvidia's Growth Potential: Nvidia is projected to see a 52% revenue increase in FY 2027, primarily driven by over $500 billion in capital expenditures planned by Amazon, Alphabet, and Meta for data centers in 2026, which will significantly boost orders for its computing units and further accelerate growth.
- Strong Performance from Microsoft: Following its Q2 FY 2026 earnings, Microsoft exceeded expectations with Azure's cloud platform achieving a 39% year-over-year growth, and despite a drop in stock price, this presents an excellent buying opportunity for investors, highlighting its critical role in the AI investment trend.
- Meta's Low Valuation: With a forward P/E of 22.2, Meta is undervalued despite a 22% revenue growth in Q4 2025 and projected growth rates of 25% and 17% for the next two years, suggesting that investors can capitalize on this low valuation to acquire shares of a company expected to outperform the market's typical growth rate.
See More
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- Accelerated AWS Growth: In Q4 2022, Amazon's overall sales rose 14% year-over-year, with AWS growing at 24%, highlighting its increasing importance in AI model development and potential for future growth.
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2026, primarily for data center expansion, which may strain cash flows; however, if AI computing demand persists, this investment could be justified.
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See More
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- Nvidia Growth Outlook: Analysts project Nvidia's revenue will rise by 52% in FY 2027, driven by over $500 billion in capital expenditures planned by Amazon, Alphabet, and Meta for data centers in 2026, positioning Nvidia to capture a significant share and sustain its growth trajectory.
- Microsoft Cloud Performance: Microsoft's Q2 FY 2026 earnings report revealed a strong 39% year-over-year growth in its Azure cloud platform, and despite a stock price decline, the management's performance exceeding expectations presents a buying opportunity for investors, highlighting its critical role in the AI investment trend.
- Meta Platforms Valuation Appeal: Trading at a forward P/E of 22.2, Meta Platforms is valued similarly to the market average, yet it is expected to grow revenue by 22% in Q4 2025 and 25% this year, indicating a growth rate that significantly outpaces the market, allowing investors to capitalize on this undervaluation.
- Market Investment Opportunities: Among the
See More
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- Successful Fundraising: In August 2025, Cohere raised $500 million, valuing the company at $6.8 billion, with investors including AMD, Nvidia, and Salesforce, reflecting market recognition of its capital-efficient model and strengthening its position in the competitive AI landscape.
- Improved Gross Margins: Cohere's gross margins averaged about 70% in 2025, expanding by 25 basis points year-over-year, demonstrating the company's ability to achieve sustainable growth by optimizing resource allocation and managing customer demand without being affected by market volatility.
- Market Expansion Plans: Cohere plans to continue expanding into the European market in 2026 and build its AI agent platform, North, anticipating another year of rapid growth, with the CEO indicating that the company is poised for a public market debut to attract more investor interest.
See More
Electric Vehicle Market Outlook and Investment Opportunities
- Lucid Delivery Growth: Lucid delivered 15,841 vehicles in 2025, marking a 55% increase year-over-year, with over one-third of deliveries occurring in Q4, indicating strong momentum in the EV market despite ongoing profitability challenges.
- Production Capacity Boost: Lucid's Q4 production surged 116% sequentially from Q3 and 148% year-over-year, demonstrating effective resolution of production bottlenecks and setting the stage for continued record-breaking deliveries.
- Nio Delivery Milestone: Nio delivered over 326,000 vehicles in Q4 2025, a nearly 72% increase year-over-year, achieving a new monthly high of 48,135 vehicles in December, showcasing robust growth driven by new sub-brands despite fierce market competition.
- Improving Profit Outlook: Nio is projected to achieve an adjusted operating profit between $100 million and $172 million for Q4, marking a significant step towards profitability, with plans to break even on an adjusted basis by 2026, boosting investor confidence.
See More
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- Refining Margins Surge: In 2026, refiners like Marathon Petroleum reported a margin of $18.65 per barrel, a 50% increase year-over-year, indicating strong profitability in the refining sector amidst falling crude prices, which is likely to attract more investor interest.
- Demand Growth vs. Capacity Constraints: Despite forecasts of declining crude prices, the EIA projects a 1.2 million barrels per day increase in liquid fuel consumption in 2026, driving demand for gasoline, diesel, and jet fuel beyond refining capacity, thereby enhancing profit margins for refiners.
- Strong Market Performance: As of February 11, 2026, stocks of Marathon Petroleum, Phillips 66, and Valero Energy have risen 28%, 25%, and 25% year-to-date, significantly outperforming the S&P 500's 1.6% increase, reflecting robust market confidence in the refining industry.
- Optimistic Future Outlook: While risks such as Middle Eastern conflicts or economic recessions exist, refining stocks are seen as having further upside potential, making a $1,000 investment at this time potentially lucrative, especially given the positive industry outlook.
See More
Valuations of the Magnificent Seven Stocks Approaching Attractive Levels
- Valuations Near Market Average: The Magnificent Seven stocks trade at forward P/E ratios between 22 and 30, aligning closely with the S&P 500's 21.8, indicating that despite their strong performance, they are not overvalued, making them attractive for investors.
- Nvidia's Growth Potential: Nvidia is projected to see a 52% revenue increase in FY 2027, primarily driven by over $500 billion in capital expenditures planned by Amazon, Alphabet, and Meta for data centers in 2026, which will significantly boost orders for its computing units and further accelerate growth.
- Strong Performance from Microsoft: Following its Q2 FY 2026 earnings, Microsoft exceeded expectations with Azure's cloud platform achieving a 39% year-over-year growth, and despite a drop in stock price, this presents an excellent buying opportunity for investors, highlighting its critical role in the AI investment trend.
- Meta's Low Valuation: With a forward P/E of 22.2, Meta is undervalued despite a 22% revenue growth in Q4 2025 and projected growth rates of 25% and 17% for the next two years, suggesting that investors can capitalize on this low valuation to acquire shares of a company expected to outperform the market's typical growth rate.
See More
Amazon's AI Business Outlook Looks Promising
- Stock Performance Decline: Since 2025, Amazon's stock has dropped about 7%, despite significant revenue and earnings growth, indicating a market reassessment of its valuation that may impact investor confidence.
- Accelerated AWS Growth: In Q4 2022, Amazon's overall sales rose 14% year-over-year, with AWS growing at 24%, highlighting its increasing importance in AI model development and potential for future growth.
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2026, primarily for data center expansion, which may strain cash flows; however, if AI computing demand persists, this investment could be justified.
- Investment Recommendation: Although The Motley Fool's analyst team did not include Amazon in their current top stock picks, they believe Amazon is poised for a rebound in 2026, making it a stock worth considering for long-term investors.
See More
Nvidia, Microsoft, and Meta Platforms Show Growth Potential
- Nvidia Growth Outlook: Analysts project Nvidia's revenue will rise by 52% in FY 2027, driven by over $500 billion in capital expenditures planned by Amazon, Alphabet, and Meta for data centers in 2026, positioning Nvidia to capture a significant share and sustain its growth trajectory.
- Microsoft Cloud Performance: Microsoft's Q2 FY 2026 earnings report revealed a strong 39% year-over-year growth in its Azure cloud platform, and despite a stock price decline, the management's performance exceeding expectations presents a buying opportunity for investors, highlighting its critical role in the AI investment trend.
- Meta Platforms Valuation Appeal: Trading at a forward P/E of 22.2, Meta Platforms is valued similarly to the market average, yet it is expected to grow revenue by 22% in Q4 2025 and 25% this year, indicating a growth rate that significantly outpaces the market, allowing investors to capitalize on this undervaluation.
- Market Investment Opportunities: Among the
See More
