3 "Magnificent Seven" Stocks Worth Buying Right Now
2026-07-16 11:12
•James Brumley •The Motley Fool
••••• •••••• Axe Capital view
Three Tech Giants Worth Watching Despite Global Headwinds
Microsoft, Amazon, and Alphabet trade below potential making them interesting for long-term investors, including those watching rand-hedge exposures.
The so-called Magnificent Seven have taken a beating from peak levels, with Microsoft down about 25%, and Amazon and Alphabet not far behind. But beneath the surface, these are still infrastructure giants powering the future economy. Microsoft’s cloud growth slowdown and gaming struggles are real, yet management’s corrective moves suggest they’re not complacent. Amazon’s AWS growth remains robust at 28%, a critical driver amid heavy AI infrastructure spending that seems priced in already. Alphabet’s revenue strength across search, cloud, and mobile apps shows resilience, even as short-term tech hype crashes create volatility. For South African investors, direct access to these plays is tricky. Naspers and Prosus offer some exposure but come with complexity and local risks. Alternatively, watching USD/ZAR closely makes sense: any dollar strength supports a safer hedge if SA equities get rattled by global tech swings. I’d be cautious about buying outright but would watch closely for a better entry point amid volatility. This view might be wrong if AI hype fades faster than expected or if US interest rates spike again, hurting growth stocks more. this is just my opinion and not financial advice
Wait for a pullback below current levels before adding Naspers or Prosus for selective exposure to global tech, and hedge with USD/ZAR to manage rand risk.
- Naspers
- Prosus
- USD/ZAR
- Renewed US interest rate hikes hurting growth stocks
- Slower global AI adoption reducing cloud growth
6/10
Despite underperformance compared to the S&P 500 this year, three Magnificent Seven stocks—Microsoft, Amazon, and Alphabet—are considered undervalued and poised for long-term recovery. Microsoft faces cloud growth slowdown and gaming weakness but is taking corrective action. Amazon's AWS remains strong despite heavy AI infrastructure spending concerns. Alphabet's diversified businesses across search, cloud, and mobile platforms show resilience regardless of economic conditions.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: James Brumley
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: MSFT, AMZN, GOOG, GOOGL, GOOGM, GOOGN
Sentiment: Positive - Stock down 25% from peak with analyst consensus price target 40% above current price. Management taking corrective actions including workforce restructuring and gaming unit reorganization. Market concerns about AI spending appear overpriced into current valuation. AWS cloud business growing 28% year-over-year with strong market position and new partnerships. Despite heavy AI infrastructure spending and debt issuance concerns, the underlying business fundamentals remain solid and the AI opportunity is real.
Keywords: Magnificent Seven, artificial intelligence, cloud computing, undervalued stocks, capital expenditure, tech stocks
Insights:
- MSFT: Positive: Stock down 25% from peak with analyst consensus price target 40% above current price. Management taking corrective actions including workforce restructuring and gaming unit reorganization. Market concerns about AI spending appear overpriced into current valuation.
- AMZN: Positive: AWS cloud business growing 28% year-over-year with strong market position and new partnerships. Despite heavy AI infrastructure spending and debt issuance concerns, the underlying business fundamentals remain solid and the AI opportunity is real.
- GOOG: Positive: All business segments performing well with Google Services revenue up 16% and cloud computing up 63% year-over-year. Strong competitive moats across search, mobile (Android), and cloud. Recent 12% decline appears to be volatility from other tech headlines rather than company-specific weakness.