The author already owns all seven 'Magnificent Seven' stocks but plans to buy more of Nvidia, Alphabet and Amazon, which he sees as major beneficiaries of the AI infrastructure build-out. Amazon is expected to spend about $220 billion on data centers in 2026 and Alphabet about $200 billion, and the article argues these investments will generate high returns. Google Cloud revenue rose 82% year over year in Q2, with a 36% operating margin and over $500 billion in backlog. AWS grew 37% in Q2 and accounted for about 60% of Amazon's operating profit from roughly 21% of revenue. Nvidia benefits because its GPUs still supply most of the computing power for these cloud providers; the company said the five largest AI hyperscalers will spend nearly $800 billion on data centers this year, rising to $1.3 trillion next year, and projected 70% revenue growth in 2027. The author still considers Nvidia the top pick among the seven.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Related news
- Warren Buffett Bought This Magnificent Artificial Intelligence (AI) Stock a Year Ago. Here's Why It's Still a Buy Today.
Berkshire Hathaway bought 17.86 million Alphabet shares in Q3 2025, and successor Greg Abel added 36.4 million shares in Q1 2026 and committed another $10 billion through a private placement to fund Alphabet's AI infrastructure expansion. The article argues Alphabet combines its dominant Search, Chrome and YouTube franchises with AI through Gemini, Google Cloud, and its in-house TPU chips. In the second quarter, revenue rose 24% to $119.79 billion and net income reached $112.1 billion, though about $77 billion came from unrealized gains on its 14% Anthropic stake. Shares are up 11% this year and 42% over 12 months, with a market cap above $4 trillion.
- Elon Musk’s Roadster, Nvidia’s Space AI Push, Nadella’s Security Warning: Mag 7 Voices This Week
Tesla and SpaceX CEO Elon Musk featured in a joint Tesla-SpaceX broadcast of the Roadster demonstration, where the car used thrusters to land after an inverted jump, though Musk has acknowledged it will not materially move Tesla’s revenue and production is set to begin in 2028. Investor Gene Munster called the demonstration an “engineering flex” with no commercial value. Musk also pledged that SpaceX would reimburse users if Grok Bot made an incorrect purchase, while Nvidia CEO Jensen Huang said Nvidia now counts SpaceX alongside its cloud customers and that the two companies are designing a new server architecture for space and Earth. Huang also said the U.S. and China need to work together to keep AI development safe. On Stocktwits, retail sentiment on TSLA slipped to bearish, with chatter up nearly 150% over the past week.
- This Magnificent Seven Stock Could Make Investors Richer by 2027
The article assesses NVIDIA, which trades at $222.58, up 19.63% year to date, and says reaching $400 by the end of 2027 would require about an 80% gain. The consensus price target is $328.72, implying 47.7% upside, and analysts expect fiscal 2028 revenue of $692.2 billion, up 68% from $411.7 billion, with EPS of $15.9146. At $400, the forward P/E would be about 25x, versus roughly 14x fiscal 2028 earnings at the current price. Catalysts cited include the Vera Rubin ramp, top five hyperscaler capex rising from nearly $800 billion in 2026 to $1.3 trillion in 2027, and demand exceeding supply. Risks include China data center revenue being excluded from guidance, gross margins falling to 71% to 72% in Q4 due to memory costs, and a beta of 2.216.
- Cathie Wood Is Buying Shares of This Bargain “Magnificent Seven” Stock Before Oct. 21. Should You?
Ark Invest's Cathie Wood bought 20,125 Meta Platforms shares on October 13 and 9,577 more the next day for her Ark Next Generation Technology ETF, where Meta is the second-largest holding at a 5.7% weight. The article links the move to Meta's AI push: its personal AI agent Muse launched last month and its downloads reached 5 million, ahead of ChatGPT and Claude after their launches, while Meta released Muse Wonder and Muse Wonder Full models this week. Meta reports third-quarter earnings on October 21, when investors will watch its capital spending and AI monetization, and the stock trades at 24x forward earnings, higher than in recent months but still inexpensive given its business. The author argues long-term investors do not need to rush ahead of the report, since gains or losses over days or weeks have little impact over five or 10 years.
- These 2 Stocks Have Run Circles Around the Magnificent Seven This Year, and Wall Street Says There Is More Upside Ahead
The article compares two lesser-known stocks, Revolution Medicines (RVMD) and Oruka Therapeutics (ORKA), which have both more than doubled this year and outpaced the Magnificent Seven. Revolution Medicines earned approval this year for Rasonque in metastatic pancreatic cancer, with a Phase 3 median overall survival of 13.2 months versus 6.7 months for cytotoxic chemotherapy, and some analysts project $20.8 billion in total peak revenue. Its average price target of $259.14 implies 35.7% upside, which the author considers too optimistic. Oruka has no approved medicine; its lead candidate ORKA-001, for plaque psoriasis, is in Phase 2a with encouraging results and could be dosed once or twice a year, while its $155 average target implies 95% upside. The author views Oruka as riskier than Revolution Medicines because ORKA-001 has not yet started Phase 3 trials.
- President Donald Trump's Investment Team Dumped AMD in August and Bought Up to $25 Million in One of the Cheapest "Magnificent Seven" Stocks
According to the latest U.S. Office of Government Ethics filing, President Donald Trump's independent investment team made 517 trades in August, bringing its total to more than 29,000 trades in stocks, ETFs and debt securities since January 2025. In August the team sold up to $5 million of Advanced Micro Devices (AMD) and bought up to $25 million of Meta Platforms (META), its largest single purchase that month. The article suggests the AMD sale may relate to bubble concerns, as investors often overestimate how quickly technology gets optimized. For Meta, it points to AI-driven ad tools and a valuation that made it the second-cheapest Magnificent Seven stock on future cash flow entering October.
Related markets
Latest news
- Meta Earnings: What To Look For From META
Meta Platforms (NASDAQ:META) will report earnings this Wednesday after the market closes. Last quarter, revenue reached $60.8 billion, up 28% year on year and above analysts' expectations, though revenue guidance for next quarter slightly missed forecasts; daily active users hit 3.6 billion, up 3.4%. The market expects revenue growth of 23.6% this quarter, slowing from 26.2% a year earlier, and analysts have generally reconfirmed their estimates over the past 30 days. Over the last month, consumer internet stocks have gained 1.3% on average, while Meta is down 4.8%.
- An AI bust could come from places investors arent watching , an economist says
Concerns about an AI bubble are growing, and TS Lombard's Dario Perkins warns that investors may be overlooking other risks. Debt among smaller cloud providers, model developers and suppliers could reach $2 trillion by the end of 2027. Perkins does not see this as a systemic risk, but warns that earnings disappointments and canceled orders could ripple through the ecosystem, and that a chip glut could follow over-ordering. Much of the industry's revenue growth still comes from spending within the AI ecosystem rather than from businesses and consumers outside it. He also flags political backlash, noting that ordinary people dislike AI and nearby datacenters, and warns that one high-profile accident could turn AI toxic.
- Yen jumps after JGB auction draws big demand , euro finds relief
The yen rose 0.2% to 158.15 per dollar in Asian trading after a 20-year Japanese government bond auction drew bids of 5.84 times the amount sold, well above the 4.01 times at the previous auction, and the yield fell 6 basis points to 3.71%. A State Street strategist said the record demand suggests sidelined cash is returning and that JGBs are becoming a relative haven from political and fiscal volatility in Europe, particularly France. Anti-government protests in France prompted curfews in several cities, while Italy said it would send 500 troops after two days of unrest, and the euro rallied 0.2% to $1.1234. Elsewhere, bitcoin slipped 0.3% to $81,674.25 and ether edged down 0.2% to $2,393.21.
- Unemployment rate dips to 4 . 7 % - but vacancies hit five - year low
Vacancies fell by 21,000 to 691,000 in the three months to September, the biggest drop since the three months to March and the lowest since July to September 2014 outside the pandemic, while unemployment dipped in the three months to August. Payroll numbers were down 66,000 over the year to September. The ONS said the fall was mainly among smaller firms struggling with higher labour costs, following rises in employer national insurance, the minimum wage and workers' rights. A CBI survey found labour costs and regulations were making it harder to create jobs, and firms urged the Chancellor not to add to their burden in the October 28 Budget. ICAEW's Suren Thiru said the labour market is 'running on idle' and unemployment could climb above 5 per cent, while Shadow Chancellor Andrew Griffith blamed Labour's 'Jobs Tax' and red tape.
- CNBC Daily Open: Tech rebounds in the U.S., but Asia isn’t buying it yet
U.S. tech stocks rebounded as the Nasdaq Composite rose more than 1% on Monday, with Nvidia up 1.4% and Tesla up 3.8%. In Asia, however, tech shares fell on Tuesday, with South Korea's Kospi down over 4% and Japan's Nikkei 225 down 1.6%. Nvidia also unveiled plans to back four German AI startups as part of its nearly $10 billion European investment commitment. Jenny Lee of Granite Asia said Asian companies are reaching IPOs much sooner, often at four to five years old, while Jio Platforms' Indian IPO saw its anchor investor quota oversubscribed more than 30 times, aiming to raise up to 302 billion rupees ($3.2 billion). In Singapore, several agricultural stocks fell after Senior Minister K Shanmugam warned that companies would not escape responsibility for possible roles in the haze, noting seven firms had been questioned by the Singapore Exchange.
- NiSource (NI) Stock Looks Overvalued Against Its Dividend Outlook
NiSource has nearly doubled shareholders' money over the past five years, delivering a 97.6% total return, which raises the question of whether dividends can justify the current share price. The article highlights a new 20-year energy agreement with Microsoft, including customer-funded grid upgrades and long-term electric service for data centers, which may affect future capital needs and cash-flow visibility. Using a Dividend Discount Model with inputs of about $1.35 dividend per share, roughly 9.07% return on equity, a payout ratio slightly above 61%, and implied dividend growth of about 3.5%, the estimated intrinsic value sits meaningfully below the current share price of $41.95. The model still does not bridge that gap, suggesting income investors are paying a premium for a relatively steady payout with modest assumed growth.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.