Ranking the Best "Magnificent Seven" Stocks to Buy for 2026. Here's My No. 4 Pick.

In a matter of months, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) went from one of the worst-performing "Magnificent Seven" stocks to the best-performing year to date, even better than Nvidia. The tech giant's stock price has now more than doubled from its 52-week low and surpassed Microsoft to take the final podium spot alongside Apple and Nvidia as the three most valuable companies in the world.

Welcome to part four in a series of articles where I rank the best Magnificent Seven stocks to buy for 2026. Tesla was the seventh selection, with Apple coming in at No. 6, below Amazon in the fifth position. Here's why Alphabet is ahead of these names but behind Nvidia, Microsoft, and Meta Platforms.

Image source: Alphabet.

From out of favor to a Wall Street darling

Less than six months ago, Alphabet wasn't just cheaper than its big tech peers -- it was also the only Magnificent Seven stock that was less expensive than the S&P 500.

Alphabet's meteoric run-up showcases the importance of narratives in the stock market. Alphabet's business hasn't fundamentally changed, but sentiment has. Earlier this year, there was widespread doubt that Alphabet would be a leader in artificial intelligence (AI). The biggest threat is that Google Search, which accounts for the majority of Alphabet's earnings, may lose market share to other information resources, such as OpenAI's ChatGPT.

Alphabet has largely alleviated those fears through the rapid adoption of Gemini, both through the Gemini app and by embedding Gemini into Google Search via AI overviews and summary tools. On Nov. 18, Alphabet launched Gemini 3, the most powerful version of its AI chatbot yet. The stock jumped 5.4% between Nov. 19 and Nov. 21 compared to a 0.2% drop in the S&P 500.

For over two decades, Google Search has been the dominant search engine. So it's natural for investors to have overestimated Google Search's decline due to AI. After all, Netflix was an existential threat to Blockbuster, just as the iPhone was to BlackBerry. But this isn't the case with Alphabet. In fact, Alphabet is exceptionally well-positioned to be a net beneficiary of AI. This is now reflected in its all-time high stock price.

In addition to Google Search, Alphabet owns YouTube, Google Cloud, and services like Gmail, Google Drive, and Google Photos. Alphabet's "other bets" division includes self-driving platform Waymo, Google Fiber, and more. Alphabet is a leader in quantum computing through Google Quantum AI, which introduced the highly advanced Willow processor in December 2024.

Alphabet has multiple levers to pull to monetize AI. It is diversified, but not overly diversified to the point where there's inefficiency and a lack of innovation. In fact, Alphabet's growth and margins have been accelerating. And it remains a cash cow -- paying its first-ever dividend last year and now regularly scheduled quarterly dividends, as well as consistently repurchasing more than enough stock to offset stock-based compensation and avoid net share dilution.

Alphabet is a solid pick for 2026

Alphabet is a strong buy for 2026. And the only reason it's not higher on my list is that the valuation isn't as dirt cheap as it used to be, although it's still reasonable at 28.5 times forward earnings estimates. And because I have even more conviction in Nvidia, Meta Platforms, and Microsoft.

Find out how these remaining three companies stack up in my upcoming rankings.

Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla. The Motley Fool recommends BlackBerry and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.