Nvidia, Alphabet, and Amazon Lead the Pack Among Magnificent Seven Stocks

The 'Magnificent Seven' group of stocks includes some of the world's largest companies. These seven companies are Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, Meta Platforms, and Tesla. While every company in this group has been a long-term success story, not all of them make for good buys.

The three that I think are the best buys are Nvidia, Alphabet, and Amazon. These companies have been investing heavily in AI data centers, which is a growing trend. Nvidia estimates that the big five AI hyperscalers will spend $1.3 trillion on data center capital expenditures in 2027.

Nvidia's stock price could double over the next year if it just meets expectations. The company currently trades for a mere 14.4 times next year's earnings, with a trailing P/E ratio of 29. Alphabet and Amazon are also spending big on AI data centers, but they operate leading cloud computing providers that require an incredible amount of computing power.