Prediction: This Unstoppable AI Stock Will Be the Top Performing "Magnificent Seven" Stock of 2025

Motley Fool
05 Apr
  • Nvidia has the highest projected growth rate for 2025 of the "Magnificent Seven" stocks.
  • The stock is fairly cheap when forward earnings are considered.

While the "Magnificent Seven" stocks have been some of the best investments over the past few years, they've been poor performers in 2025. Investors are moving their money from stocks they deem risky to either cash or safer investments, and the Magnificent Seven are some of the stocks they turn to first to raise capital. These are:

  1. Apple
  2. Nvidia (NVDA -7.03%)
  3. Microsoft
  4. Alphabet
  5. Amazon
  6. Meta Platforms
  7. Tesla

Meta is the best performing of the seven, as its stock price has been essentially flat since the beginning of 2025. The rest of the stocks are down at least 10% from their 2025 entry points, and most are down 20% from their highs established in February.

However, we're just entering Q2, so there's a lot of time before flipping the calendars to 2026. Of these seven, which stock has the best chance to beat the rest?

Nvidia rises above the rest of the Magnificent Seven

Tesla is easily the most volatile stock in this group, as it's dealing with some brand issues centering around CEO Elon Musk's involvement in President Donald Trump's administration. I'm not sure if it will be sorted out by the end of 2026, so I don't think Tesla will be the best pick.

Apple has no growth to speak of and is only projected to increase sales by 4.6% this fiscal year, so it's also out. While I think Microsoft, Alphabet, Amazon, and Meta will have strong finishes to 2025, they don't have the growth that Nvidia has.

Nvidia is my top pick of the Magnificent Seven, and I think it will be one of the best stocks in the market this year.

While the market is worried about trade wars and tariff fears, Nvidia is going full steam ahead in powering the artificial intelligence (AI) revolution. Its graphics processing units (GPUs) are the computing muscle behind most of the AI models used today, and there could be incredible growth ahead.

In 2024, data center capital expenditures reached around $400 billion. However, Nvidia expects that figure to rise to more than $1 trillion by 2028. That's monster growth for this industry, and Nvidia is well-positioned to capitalize on it with its best-in-class offerings.

However, investors fear that Nvidia's stock has been on too big of a run and is too expensive right now. I think that's a bad way of looking at it, as Nvidia may not grow as rapidly as it once did but still has plenty of growth ahead to be the top-performing Magnificent Seven stock of 2025.

Nvidia's stock isn't all that expensive

If you look at its trailing price-to-earnings ratio (P/E), Nvidia is the second-most expensive of the Magnificent Seven group -- but only by a small margin (Tesla was removed from this chart because it trades for 131 times earnings, which makes the graph harder to read).

AAPL P/E Ratio data by YCharts.

Wall Street analysts project that Nvidia's revenue will grow at a 57% pace this year, which is faster than any other company in the Magnificent Seven. However, the trailing P/E ratio doesn't give Nvidia any credit for future growth. When you incorporate growth projections through the use of the forward P/E ratio, Nvidia's stock looks far cheaper than most of the Magnificent Seven.

AAPL P/E Ratio (Forward) data by YCharts.

From this point of view, only Alphabet and Meta are cheaper than Nvidia, which makes me even more bullish on its stock than its peers.

The market is selling Nvidia's stock due to fears of economic uncertainty that could potentially slow data center buildouts. However, competitors can't afford to fall behind in the AI arms race, so the bulk of planned spending should still occur. Once investors hear from the big tech companies about their Q1 results, I think it will be enough to turn these stocks around and head higher, with Nvidia poised to lead the way.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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