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The Magnificent Seven has had more than its fair share of the spotlight in recent years, with outsized growth from the mega-cap bunch consistently impressing the market and leading to huge gains.
Still, several members of the bunch – Microsoft and NVIDIA – trade at highly attractive valuations, an important hurdle to clear given increased market volatility as of late.
Microsoft's cloud growth and NVIDIA's unmatched hardware dominance in the AI era mean investors are still getting rock-solid earnings power at multiples that look very reasonable relative to their long-term growth trajectories.
NVIDIA's Unmatched Dominance
NVIDIA's recent results comfortably cleared already high expectations. Revenue surged 106% year over year to $96.2 billion, whereas adjusted EPS jumped 120% to $2.22.
As expected, Data Center results remained the highlight of the release. Data Center revenue totaled $89.0 billion, up a triple-digit 117% year over year and 18% sequentially, handily clearing our consensus estimate of roughly $85.1 billion.
Overall sales growth has been historically strong, reflecting a trend that we likely won't see from another company its size anytime soon.
The stock is currently a Zacks Rank #1 (Strong Buy), with EPS revisions continuing the multi-year trend of moving higher on robust results. The stock undoubtedly continues to reflect one of the strongest bets on the continued AI craze, underpinned by red-hot demand that isn't going to slow anytime soon.
Shares currently trade at a 16.4X forward 12-month earnings multiple, reflecting a high discount relative to the 37.7X five-year median. Surging growth has kept the multiple attractive, with current Zacks Consensus EPS estimates suggesting 93% earnings growth in its current fiscal year and 66% in its next.
Microsoft Eases Cloud Concerns
Microsoft similarly posted strong results in its latest release, with sales up 18% YoY and earnings up 23% YoY. It delivered strong Cloud results, a key benchmark that has been watched closely amid the billions it's been investing in AI infrastructure. Its revenue growth hasn't been as impressive as NVIDIA, of course, but it's still posted consistent double-digit growth rates since early 2024.
Microsoft's Intelligent Cloud results include Azure, its cloud computing platform that provides AI computing power to businesses. Intelligent Cloud revenue came in at $39.3 billion, beating our consensus estimate handily and growing at an accelerated rate of 32% YoY.
Shares currently trade at a 24.1X forward 12-month earnings multiple, reflecting a solid discount relative to the 29.6X five-year median. Shares got even cheaper earlier this year as worries about its Cloud business took hold, but the multiple remains at levels we haven't consistently seen in years.
The near-term earnings picture also remains strong for MSFT, with expectations trending higher across the board over recent months. Our current consensus estimates suggest nearly 10% earnings growth in its current fiscal year before accelerating to a 19% YoY growth rate in its next.
Bottom Line
Despite strong share gains in recent years, both Microsoft and NVIDIA trade at attractive valuations, with neither reflecting overly stretched growth stories. That said, their stories do increasingly revolve around continued enterprise AI adoption and the broader buildout, but guidance from each and results from other companies involved in the trade don't suggest the frenzy slowing down anytime soon.
For those seeking a much less-sensitive Magnificent Seven member to the AI trade, Apple remains a top-tier option. Apple does trade at an elevated premium relative to MSFT and NVDA, though that's a reflection of the safety net it enjoys, with Apple's stability largely unmatched given an entrenched consumer base.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Microsoft, NVIDIA and Apple
For Immediate Release
Chicago, IL – September 21, 2026 – Today, Zacks Investment Ideas feature highlights Microsoft (MSFT - Free Report) , NVIDIA (NVDA - Free Report) and Apple (AAPL - Free Report) .
These "Magnificent 7" Members Still Look Cheap
The Magnificent Seven has had more than its fair share of the spotlight in recent years, with outsized growth from the mega-cap bunch consistently impressing the market and leading to huge gains.
Still, several members of the bunch – Microsoft and NVIDIA – trade at highly attractive valuations, an important hurdle to clear given increased market volatility as of late.
Microsoft's cloud growth and NVIDIA's unmatched hardware dominance in the AI era mean investors are still getting rock-solid earnings power at multiples that look very reasonable relative to their long-term growth trajectories.
NVIDIA's Unmatched Dominance
NVIDIA's recent results comfortably cleared already high expectations. Revenue surged 106% year over year to $96.2 billion, whereas adjusted EPS jumped 120% to $2.22.
As expected, Data Center results remained the highlight of the release. Data Center revenue totaled $89.0 billion, up a triple-digit 117% year over year and 18% sequentially, handily clearing our consensus estimate of roughly $85.1 billion.
Overall sales growth has been historically strong, reflecting a trend that we likely won't see from another company its size anytime soon.
The stock is currently a Zacks Rank #1 (Strong Buy), with EPS revisions continuing the multi-year trend of moving higher on robust results. The stock undoubtedly continues to reflect one of the strongest bets on the continued AI craze, underpinned by red-hot demand that isn't going to slow anytime soon.
Shares currently trade at a 16.4X forward 12-month earnings multiple, reflecting a high discount relative to the 37.7X five-year median. Surging growth has kept the multiple attractive, with current Zacks Consensus EPS estimates suggesting 93% earnings growth in its current fiscal year and 66% in its next.
Microsoft Eases Cloud Concerns
Microsoft similarly posted strong results in its latest release, with sales up 18% YoY and earnings up 23% YoY. It delivered strong Cloud results, a key benchmark that has been watched closely amid the billions it's been investing in AI infrastructure. Its revenue growth hasn't been as impressive as NVIDIA, of course, but it's still posted consistent double-digit growth rates since early 2024.
Microsoft's Intelligent Cloud results include Azure, its cloud computing platform that provides AI computing power to businesses. Intelligent Cloud revenue came in at $39.3 billion, beating our consensus estimate handily and growing at an accelerated rate of 32% YoY.
Shares currently trade at a 24.1X forward 12-month earnings multiple, reflecting a solid discount relative to the 29.6X five-year median. Shares got even cheaper earlier this year as worries about its Cloud business took hold, but the multiple remains at levels we haven't consistently seen in years.
The near-term earnings picture also remains strong for MSFT, with expectations trending higher across the board over recent months. Our current consensus estimates suggest nearly 10% earnings growth in its current fiscal year before accelerating to a 19% YoY growth rate in its next.
Bottom Line
Despite strong share gains in recent years, both Microsoft and NVIDIA trade at attractive valuations, with neither reflecting overly stretched growth stories. That said, their stories do increasingly revolve around continued enterprise AI adoption and the broader buildout, but guidance from each and results from other companies involved in the trade don't suggest the frenzy slowing down anytime soon.
For those seeking a much less-sensitive Magnificent Seven member to the AI trade, Apple remains a top-tier option. Apple does trade at an elevated premium relative to MSFT and NVDA, though that's a reflection of the safety net it enjoys, with Apple's stability largely unmatched given an entrenched consumer base.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.