This "Magnificent Seven" Stock May Have Become the Most Underrated Artificial Intelligence (AI) Investment to Own Right Now

The "Magnificent Seven" stocks have become synonymous with growth. These companies are the biggest and brightest names in the world, which are known for innovation, and they possess plenty of growth opportunities related to artificial intelligence (AI). And as a result, they are also among the most valuable companies in the world.

But so far in 2026, the group hasn't been doing all that well. The Roundhill Magnificent Seven ETF, which gives investors exposure to the Magnificent Seven stocks, is down 12% thus far. Last year, it generated returns of more than 21% and widely outperformed the S&P 500, which was up by 16%. This time around, it's underperforming the broad index.

One particular Magnificent Seven stock that has been doing poorly of late is Microsoft (NASDAQ: MSFT). Entering this week, it has declined by 21% since the start of the year. Here's why it might be a steal of a deal.

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Investors may be underestimating Microsoft's potential

While there has generally been excitement around AI and how the big tech stocks might benefit from it, Microsoft has arguably been a bit of a laggard in this space. Its Copilot assistant has been helping the business grow, but there have been doubts about just how transformative it may be for its operations, with there being no shortage of reports of Copilot being a disappointment for customers.

However, the company has been growing its business thanks to AI. In its most recent quarter, its revenue for the last three months of 2025 rose by 17%, totaling $81.3 billion. CEO Satya Nadella says that the company is "only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises."

It has many strong-performing segments, including Microsoft Cloud, Microsoft 365 (consumer), and Azure, which generated year-over-year growth in excess of 20% in its most recent quarter. And those are areas of its business that may continue to benefit from AI opportunities in the future.

Microsoft's stock looks incredibly cheap right now

An underwhelming perception of Copilot and a widespread downturn in tech have resulted in Microsoft's share price sliding fast this year. But the good news is that for long-term investors, now may be a prime time to invest in this tech giant.

Currently, Microsoft's stock trades at 24 times its trailing earnings, and based on analyst projections, its forward price-to-earnings multiple is just over 20. While the stock is not quite at its 52-week low of $344.79, it looks like a terrific buy, especially if you're looking to invest for the long haul.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.