The “Magnificent Seven” tech stocks led the S&P 500 higher in recent years amid excitement about their involvement in the high-growth field of artificial intelligence (AI).
But over the past several months, many of these players have lost some momentum — and this has brought down their valuations
For the strongest of companies, I see this as a temporary move as the long-term AI story remains intact. And that means right now is an excellent time to go bargain hunting and pick up shares of my two favorite discount “Magnificent Seven” stocks: Nvidia (NASDAQ: NVDA) and Microsoft (NASDAQ: MSFT). 1. Nvidia Nvidia dominates the AI chip market, selling the graphics processing units (GPUs) that power crucial AI tasks.
This has propelled the company to record revenue levels and double- and triple-digit growth in recent years. In the latest full year, for example, revenue climbed 65% to $215 billion. The tech giant also has maintained high profitability on sales — gross margin has exceeded 70% quarter after quarter over the past couple of years.