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There are some similarities but also key differences between the Nifty 50 & Mag 7.
Mag 7 stocks currently trade at a slim premium to the S&P 500 Index.
Leaders like MSFT have transformed into GARP plays.
What were the Nifty 50?
The “Nifty 50” was a group of 50 of the most followed, large-cap stocks on the NYSE that flourished in the 1920s and early 1970s. The group of stocks included well-known, popular companies such as Walmart (WMT), Polaroid, Xerox (XRX), and Coca-Cola (KO). During the early 1970s, the Nifty 50 stocks commanded an average price-to-earnings (P/E) ratio of 40x, more than double that of the S&P 500 Index. During the 1973-1975 recession, many Nifty 50 companies suffered drawdowns of 50% or more. Nevertheless, despite the bubble narrative, these stocks registered above-average returns from 1972 to 1998.
Comparing the Nifty 50 to the Magnificent 7
Many Wall Street investors and analysts have compared the Nifty 50 to the “Magnificent 7” stocks, which include Alphabet ((GOOGL - Free Report) ), Amazon ((AMZN - Free Report) ),Apple ((AAPL - Free Report) ),Meta Platforms ((META - Free Report) ),Microsoft ((MSFT - Free Report) ),Nvidia ((NVDA - Free Report) ), and Tesla ((TSLA - Free Report) ). Like the Nifty 50, the Mag 7 stocks are growing rapidly and are trading at higher valuations than the market. Barring an early-70s-style recession, Mag 7 stocks still look extremely attractive here and have plenty of meat on the bone.
Mag 7 Stocks are Very Cheap
As of February 2026, the average forward price-to-earnings ratio (P/E) for the Mag 7 is ~28x. Meanwhile, the forward P/E of the S&P 500 is in the same ballpark at ~23.5x. Although most Mag 7 stocks have been up trending for a decade or more, the group of leaders is currently trading at the lowest premium compared to the S&P 493 in the past decade.
Image Source: Zacks Investment Research
Are Mag 7 Stocks “GARP” Plays?
Savvy investors understand that analyzing valuation metrics in a vacuum is a fool’s errand. A P/E ratio merely tells you what investors paid for past earnings. However, Wall Street is a device for discounting the future. What really should matter to investors is growth relative to valuations. It’s worth noting that in the late 1990s, many internet leaders like Yahoo! had P/E ratios that were north of 50x BEFORE their meteoric, life-changing moves.
Currently, most Mag 7 stocks are transforming into “Growth at a Reasonable Price” (GARP) plays. In other words, these stocks have the best of both worlds – reasonable valuations, with high-expected growth. For instance, though NVIDIA is a $4.6 trillion behemoth, Zacks Consensus Estimates suggest that top-and-bottom-line growth will come in around 50% over the next two years.
Image Source: Zacks Investment Research
MSFT is another prime example of a GARP play. Although its earnings are not growing as fast as NVIDIA’s, MSFT is still expected to grow top-and-bottom-line results at a double-digit clip. Meanwhile, MSFT’s P/E ratio is at its lowest level since late 2022 (just before MSFT went on a multi-month rally following the successful launch of ChatGPT).
Image Source: Zacks Investment Research
Bottom Line
While market skeptics are quick to scream “bubble” at any sign of concentrated market leadership, the underlying fundamentals of today’s tech titans tell a more nuanced story. With valuations trading at decade-low premiums relative to their growth trajectories, these companies aren’t just market leaders-they are becoming disciplined GARP plays.
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Have Mag 7 Stocks Transformed into GARP Plays?
Key Takeaways
What were the Nifty 50?
The “Nifty 50” was a group of 50 of the most followed, large-cap stocks on the NYSE that flourished in the 1920s and early 1970s. The group of stocks included well-known, popular companies such as Walmart (WMT), Polaroid, Xerox (XRX), and Coca-Cola (KO). During the early 1970s, the Nifty 50 stocks commanded an average price-to-earnings (P/E) ratio of 40x, more than double that of the S&P 500 Index. During the 1973-1975 recession, many Nifty 50 companies suffered drawdowns of 50% or more. Nevertheless, despite the bubble narrative, these stocks registered above-average returns from 1972 to 1998.
Comparing the Nifty 50 to the Magnificent 7
Many Wall Street investors and analysts have compared the Nifty 50 to the “Magnificent 7” stocks, which include Alphabet ((GOOGL - Free Report) ), Amazon ((AMZN - Free Report) ), Apple ((AAPL - Free Report) ), Meta Platforms ((META - Free Report) ), Microsoft ((MSFT - Free Report) ), Nvidia ((NVDA - Free Report) ), and Tesla ((TSLA - Free Report) ). Like the Nifty 50, the Mag 7 stocks are growing rapidly and are trading at higher valuations than the market. Barring an early-70s-style recession, Mag 7 stocks still look extremely attractive here and have plenty of meat on the bone.
Mag 7 Stocks are Very Cheap
As of February 2026, the average forward price-to-earnings ratio (P/E) for the Mag 7 is ~28x. Meanwhile, the forward P/E of the S&P 500 is in the same ballpark at ~23.5x. Although most Mag 7 stocks have been up trending for a decade or more, the group of leaders is currently trading at the lowest premium compared to the S&P 493 in the past decade.
Image Source: Zacks Investment Research
Are Mag 7 Stocks “GARP” Plays?
Savvy investors understand that analyzing valuation metrics in a vacuum is a fool’s errand. A P/E ratio merely tells you what investors paid for past earnings. However, Wall Street is a device for discounting the future. What really should matter to investors is growth relative to valuations. It’s worth noting that in the late 1990s, many internet leaders like Yahoo! had P/E ratios that were north of 50x BEFORE their meteoric, life-changing moves.
Currently, most Mag 7 stocks are transforming into “Growth at a Reasonable Price” (GARP) plays. In other words, these stocks have the best of both worlds – reasonable valuations, with high-expected growth. For instance, though NVIDIA is a $4.6 trillion behemoth, Zacks Consensus Estimates suggest that top-and-bottom-line growth will come in around 50% over the next two years.
Image Source: Zacks Investment Research
MSFT is another prime example of a GARP play. Although its earnings are not growing as fast as NVIDIA’s, MSFT is still expected to grow top-and-bottom-line results at a double-digit clip. Meanwhile, MSFT’s P/E ratio is at its lowest level since late 2022 (just before MSFT went on a multi-month rally following the successful launch of ChatGPT).
Image Source: Zacks Investment Research
Bottom Line
While market skeptics are quick to scream “bubble” at any sign of concentrated market leadership, the underlying fundamentals of today’s tech titans tell a more nuanced story. With valuations trading at decade-low premiums relative to their growth trajectories, these companies aren’t just market leaders-they are becoming disciplined GARP plays.