Google Parent Alphabet Is Now the Cheapest "Magnificent Seven" Stock. You Might Be Surprised Which Stock Ranks Second.

While a rising tide lifts all boats, an ebbing tide causes boats to move lower. A similar effect is seen with the stock market. When the major market indexes decline, so do most stocks. However, one positive side effect is that these stocks become more attractively valued.

We've seen this happen in 2025 with the so-called "Magnificent Seven" stocks. Every member of this once-high-flying group has taken a hit during the overall market sell-off, with their valuations falling as a result. Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is now the cheapest Magnificent Seven stock. But you might be surprised which stock ranks as the second-cheapest.

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Magnificent Seven valuations

Investors use many valuation metrics. Three of the most widely used are the trailing-12-month price-to-earnings (P/E) ratio, the forward P/E ratio, and the price-to-earnings-to-growth (PEG) ratio.

The table shows how the Magnificent Seven stocks compare on each of these metrics:

Data source: Yahoo! Finance. Valuations as of May 12, 2025.

As you can see, Alphabet ranks as the least expensive Magnificent Seven stock on all three valuation metrics. The tech giant's share price has been especially beaten down because of antitrust lawsuit rulings against it and worries that artificial intelligence (AI) could disrupt its Google Search business.

Meta Platforms is the second-cheapest of the group based on trailing P/E and forward P/E. This is particularly notable because the stock has held up better than most of the other Magnificent Seven stocks during the stock market tumult this year.

Interestingly, though, Nvidia claims the second-lowest PEG ratio after Alphabet. This metric, by the way, is based on analysts' five-year earnings growth projections. Nvidia's shares have sold off significantly on investors' concerns about the negative impact of the Trump administration's tariffs and trade restrictions on exports of AI chips to China.

Are growth estimates for Alphabet and Nvidia realistic?

I like using the PEG ratio for growth stocks. However, there's one major drawback to the metric: Estimating future earnings growth is tricky. If Wall Street's growth estimates for Alphabet and Nvidia are way off, the PEG ratios could be all but useless.

With Alphabet, the reliability of analysts' growth projections depends largely on what happens with the federal antitrust lawsuits. Unfortunately, no one knows what the final resolution of those cases will be. The worst-case scenario is that the company is forced to divest some of its businesses. The best-case scenario is that Alphabet wins on appeal.

The other main threat to Alphabet is that AI could cause a significant slump in Google Search advertising revenue. That could happen. On the other hand, Google seems to be doing a good job of incorporating generative AI into Google Search already. The company could navigate the transition to AI search better than rivals.

What about Nvidia? Two assumptions are critical to growth estimates for the GPU maker. First, demand for AI chips must continue to grow robustly. Second, Nvidia must stay ahead of increasing competition.

I think the first assumption is a relatively safe one. We're still only in the early innings of AI adoption. As for the second assumption, Nvidia has several deep-pocketed rivals (including some of its customers, such as Google). However, I expect that the company will remain at the forefront of AI chip innovation.

Are these cheap Magnificent Seven stocks smart picks now?

Investing in any stock comes with some level of risk. Alphabet and Nvidia are no exceptions. The key question investors must ask before buying the stocks is: Are the opportunities for reward worth the risk? I think the answer is "yes" for both Alphabet and Nvidia.

My hunch is that fears about antitrust litigation and AI search hurting Google are overblown. I predict that AI will remain a huge tailwind for the company. I also think that Alphabet's self-driving car unit Waymo will become a major growth driver over the next decade.

And I'm also optimistic about Nvidia's long-term prospects. Potential breakthroughs in AI, perhaps even artificial general intelligence (AGI), could accelerate the demand for GPUs. Nvidia is investing heavily in research and development and should retain its market leadership.

Alphabet and Nvidia are the cheapest Magnificent Seven stocks for solid reasons. However, I think they're both smart picks for aggressive investors.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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. Keith Speights has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. 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.