Magnificent Seven Tech Stocks Look Cheap After Summer Reset

JPMorgan Chase's analysts believe that the Magnificent Seven leading technology stocks are looking cheap after a summer reset. The stocks in question include Amazon (AMZN), Microsoft (MSFT), and Nvidia (NVDA) among others.

The analysts, led by Mislav Matejka, argue that these companies have undergone a significant valuation reset over the past few months. Their 12-month forward price-to-earnings multiple relative to the broader market is now near a 10-year low.

While Matejka acknowledges that some multiple compression in the Mag 7 technology stocks is justified by changes in their business models, he believes that most of the valuation adjustment has now taken place. He notes that earnings strength at the hyperscalers could continue to support their performance throughout the rest of this year and into 2027.

Nvidia's valuation stands out as particularly cheap right now, according to Matejka. He suggests that investors may want to take positions in stocks such as AMZN, MSFT, and NVDA before they rally higher.