Here Are My Top 2 "Magnificent Seven" Stocks to Buy for 2026

After a big run-up in many tech stocks this year, many of Wall Street's darlings now trade at stretched valuations. But not all of Wall Street's most popular tech stocks have fully participated in this year's rally. Surprisingly, several names in the "Magnificent Seven" have underperformed the Nasdaq Composite's sharp gains -- and two look particularly attractive: Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN)

The iPhone maker has just closed its fiscal 2025 with fourth-quarter revenue rising 8% year over year and earnings growing by double digits, helped by a record services performance. Meanwhile, the e-commerce and cloud computing specialist reported 13% revenue growth in the third quarter of 2025, with Amazon Web Services returning to 20% growth as AI (artificial intelligence) demand accelerates.

Among the Magnificent Seven, Apple and Amazon arguably stand out as the most attractive duo. And unlike some of the AI beneficiaries that have received so much attention this year, these are high-quality growth stocks rather than speculative bets.

Image source: Getty images.

1. Apple's durable ecosystem

Helping fuel its 13% year-over-year increase in earnings per share, Apple's services revenue climbed 15% to $28.8 billion in its most recent quarter. Further, this important segment boasts a gross profit margin above 75% -- far greater than its hardware gross margin. That high-margin services stream helps smooth out hardware cycles and turns each iPhone, Mac, or iPad in use into an annuity-like source of revenue for Apple.

To this end, management continues to emphasize the importance of Apple's installed base of active devices, which Apple said achieved an all-time high "across all product categories and geographic segments," in fiscal Q4.

As of the last time the company disclosed its total count of active devices, there were 2.35 billion. That kind of scale gives Apple a wide foundation for rolling out new services and AI features without relying on blockbuster new device categories every year.

Management expects total revenue to grow 10% to 12% year over year in the important holiday quarter, with iPhone revenue returning to double-digit growth, suggesting that the iPhone 17 cycle and early AI features are providing momentum heading into 2026.

Of course, shares aren't cheap. Apple stock currently trades at roughly 37 times earnings -- comfortably above the S&P 500's price-to-earnings ratio in the mid-20s.

But given Apple's momentum in services and the company's loyal customer base, I think this stock is worth its premium price.

2. Amazon's profit expansion

Amazon's most recent quarter once again demonstrated the diversified nature of its business, with strong growth in e-commerce, advertising, and Amazon Web Services (AWS).

But AWS, in particular, is worth calling out.

"AWS is growing at a pace we haven't seen since 2022, reaccelerating to 20.2% [year over year]," said Amazon CEO Andy Jassy in the company's third-quarter update. "We continue to see strong demand in AI and core infrastructure, and we've been focused on accelerating capacity -- adding more than 3.8 gigawatts in the past 12 months."

Operating income for the quarter held at $17.4 billion (the same as it was in the year-ago period), but that figure absorbed a $2.5 billion Federal Trade Commission settlement and $1.8 billion in severance costs. Excluding those items, operating income would have been $21.7 billion, implying a double-digit operating margin on the quarter's sales and highlighting how much leverage Amazon can generate from its fulfillment network, advertising, and cloud operations. This is also impressive in light of how heavily the company is investing in AI.

Speaking of AI, it's turning into a major catalyst for the company.

"We continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business," CEO Andy Jassy said in the third-quarter earnings release.

Despite a reacceleration in AWS and management's optimism about AI's impact on its business, Amazon's valuation remains quite attractive. The stock trades at about 32 times earnings -- only modestly above the broader market despite double-digit revenue growth and a cloud business that is reaccelerating.

Apple and Amazon: Top picks for 2026 and beyond

Taken together, Apple and Amazon give investors two different but complementary ways to own the Magnificent Seven theme. Apple offers a massive installed base and high-margin services on top of a loyal customer base and a proven track record. But investors have to pay a premium valuation. Amazon offers more direct exposure to AI infrastructure, along with the rest of its diversified business, but trades at a lower valuation.

Both stocks carry risks, chief among them being valuation risk since neither stock is exactly cheap. Yet for forward-looking investors who want concentrated exposure to dominant U.S. tech franchises without venturing into the most speculative corners of the market, these two look like good options for 2026.

Daniel Sparks and his clients have positions in Amazon and Apple. The Motley Fool has positions in and recommends Amazon and Apple. The Motley Fool has a disclosure policy.