Microsoft and NVIDIA Still Look Undervalued Among Mag 7 Stocks

If you've been watching the Magnificent Seven stocks and feeling like you missed the boat, here's some good news: two of the biggest names in the group might still be worth a serious look. Microsoft and NVIDIA — two titans of the AI boom — are being flagged as relatively cheap when you measure their price tags against where their earnings are likely headed.

Microsoft's pitch comes down to its cloud business picking up steam. Cloud revenue growth is accelerating, which matters a lot because cloud is essentially Microsoft's most profitable engine right now. When a company this large starts growing faster — not slower — that tends to justify a higher valuation multiple than skeptics might expect.

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NVIDIA's case is a little different but equally compelling. The chipmaker holds what analysts call "hardware dominance" in AI infrastructure — meaning when companies build out AI systems, they're overwhelmingly reaching for NVIDIA's chips. That kind of near-monopoly positioning in a red-hot market is rare, and it translates into serious, durable earnings power.

The key concept here is valuing a stock relative to its long-term growth trajectory rather than just its current price-to-earnings ratio. A stock can look "expensive" on a simple P/E basis but actually be a bargain if its earnings are compounding fast enough. That's the argument being made for both Microsoft and NVIDIA — their multiples look reasonable once you factor in how quickly profits could grow over the next several years.

Of course, no investment is a sure thing, and both stocks carry risk if AI spending slows or competition heats up. But for investors willing to think in years rather than months, the case that these two Magnificent Seven members still offer value is hard to dismiss. Continue reading at Yahoo.