2 Bargain "Magnificent Seven" Stocks to Ride the AI Investing Wave

The "Magnificent Seven" isn't just a Western from 1960. It's also a group of tech stocks that led the Nasdaq (NASDAQINDEX: ^IXIC) to double-digit gains over the past two years. I'm talking about Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon, Apple, Meta Platforms (NASDAQ: META), Microsoft, Nvidia, and Tesla. These tech players have all demonstrated their ability to deliver growth. In recent times, they've shown their strengths in the high-potential area of artificial intelligence (AI), a market expected to top $1 trillion by the end of the decade.

So it's no surprise that these players caught investors' fancy and soared as the AI boom progressed. But in recent times, the Magnificent Seven haven't been leading gains. Instead, they've led declines. As investors worry about the effect U.S. President Donald Trump's import tariffs may have on the economy, companies depending on growth have seen their shares tumble. That's left the Nasdaq in correction territory, and Magnificent Seven players at much lower valuations than a few weeks ago.

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But here's some reassuring news: Though economic troubles may weigh on these and other companies in the near term, the long-term AI story remains hearty, with companies investing billions of dollars annually in their platforms. So now is a great time to invest in AI players with solid long-term potential. Let's check out these two bargain Magnificent Seven stocks.

Image source: Getty Images.

1. Meta Platforms

Meta is the leader in social media, via owning Facebook, Messenger, WhatsApp, and Instagram. More than 3.3 billion people use at least one of these platforms daily. So it's no surprise that advertisers rush to Meta to reach people where they know they can find them. This brings in billions of dollars in revenue annually for the tech giant.

But Meta isn't only about social media. The company has big AI ambitions and is investing accordingly. Meta is already on version four of its large language model, Llama. This is a key tool to power its AI systems, such as the AI assistant found on its social media platforms. The efforts may be in their early stages. A few weeks ago, Meta said that capital spending may reach as much as $65 billion this year as the company pursues AI growth. This includes the construction of a data center that will be so big it could cover a good part of Manhattan.

How will Meta eventually monetize this? Meta aims to create AI assistants for all of its users, something that could keep people on the apps longer -- and spur advertisers to spend more there. The investment may also lead to new products and services from Meta down the road.

Today, this ambitious and profitable tech giant only trades for 23x forward earnings estimates. That's down from more than 29x just a few weeks ago, making it an excellent bargain buy.

2. Alphabet

You may know Alphabet best for something many of us use daily: Google Search. The company owns this, the most popular search engine with about 90% market share, and generates revenue as advertisers connect with us there. But Alphabet has another significant source of revenue -- one that's been growing in the double digits. I'm talking about Google Cloud, the company's cloud computing unit.

In the recent quarter, this business delivered a 30% increase in revenue to $12 billion. This growth was led by its presence in AI. Alphabet operates a global network of data centers and builds the products and services customers need when they're developing and operating an AI platform. So, by being present across the "full stack," Alphabet can gain in efficiency and keep customers coming back.

This has delivered solid results. Alphabet says its customers now use more than eight times the compute capacity that they used just eighteen months ago. This is for the key AI tasks of training and inferencing models. So, Alphabet is immediately generating revenue growth as it sells its AI products and services to customers. On top of that, the company's using its AI tools to make its own products -- such as Google Search -- better and better.

Right now, Alphabet is the cheapest of the Magnificent Seven stocks, trading for 18x forward earnings estimates. That makes it a fantastic -- and bargain -- way to ride the AI investing wave.

Should you invest $1,000 in Meta Platforms right now?

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon and Tesla. 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.