Is Now the Time to Buy One of the Worst-Performing "Magnificent Seven" Stocks of 2025?

The "Magnificent Seven" are the leading, prominent tech companies in the world: Apple, Alphabet, Amazon (NASDAQ: AMZN), Meta Platforms, Microsoft, Nvidia, and Tesla. How these stocks perform typically dictates how well the overall market does. And for many investors, they are solid, go-to growth investments to hang on to for the long term.

But while the market has been hot this year, with the S&P 500 continuing to hit new records, not all of the "Magnificent Seven" stocks have been doing that well. As of Oct. 30, the worst-performing stock of this group was Amazon, whose year-to-date return as of that date was less than 2%. It has moved higher since then, as it reported quarterly results, but it remains one of the worst performers among the Magnificent Seven this year.

Could now be the ideal time to invest in this growth stock?

Image source: Getty Images.

Strong earnings gave the stock a boost

Up until it reported earnings on Oct. 30, investors seemed unimpressed with Amazon this year. Other companies, such as Nvidia and Alphabet, have been seeing more direct gains and opportunities related to artificial intelligence (AI), and that has captivated investors. Nvidia's chips, for instance, are crucial in the development of advanced AI chatbots. Meanwhile, Alphabet has a chatbot in Gemini, which is helping to transform the company's products and services.

Amazon is investing in AI, but the results may not be as flashy or exciting.

Last week, Amazon reported a 13% increase in net sales, to $180.2 billion for the period ending Sept. 30. The company beat analysts' expectations for revenue and earnings per share, and its cloud business, Amazon Web Services, also generated $33 billion in revenue, which was higher than analysts' estimates of $32.42 billion.

The tech company also recently announced it would be cutting 14,000 jobs, which should improve the bottom line even further. Amazon, however, says that the move has more to do with culture and fit. With around 1.5 million employees as of the end of last year, it's a relatively modest reduction for the tech giant overall.

The stock is trading at historically low levels

It wasn't all that long ago when investors had to pay a massive premium for Amazon's stock. But as its earnings have risen and the stock's gains have been nominal, its valuation has improved and become much more attractive. Here's a look at the stock's price-to-earnings (P/E) multiple over the past decade.

AMZN PE Ratio data by YCharts

At a P/E of 34, it's still more expensive than the average stock on the S&P 500, which trades at 26 times its earnings, but the premium is much more modest these days than it was in the past. For investors, it could symbolize an opportunity to buy while the valuation isn't bloated.

Why Amazon looks like a no-brainer buy

Amazon has a hugely successful and growing business, one that looks to be in fantastic shape to benefit from the opportunities in AI. It's a promising long-term investment to hang on to that the market may have been overlooking recently. But that's great news if you want a good stock to buy and hold, as Amazon has tremendous potential to get even bigger in the long run, as it is targeting many different growth opportunities in healthcare, groceries, and AI.

Buying Amazon stock today could be a move you thank yourself for making in the future.

David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool 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.