The S&P 500 index has roared higher over the past 16 months, rebounding from its bear market low to reach record levels -- and confirm a new bull market. And the movement has been led by one group of stocks in particular. Dubbed the "Magnificent Seven" in reference to the 1960 Western, these players are technology stocks, and each one is a leader in its specialty area.
Some investors may worry that after these gains, it's too late to get in on these stock market stars. The concern is they may have become too expensive and are ready to stagnate or fall. But a stock with spectacular momentum still could have plenty of room to run if the company has strong long-term prospects. And that's the case of some of today's top-performing stocks. Let's check out two Magnificent Seven companies to buy hand over fist right now.
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1. Nvidia
Nvidia (NVDA +1.67%) sells the world's top-performing artificial intelligence (AI) chip, the H100 graphics processing unit (GPU) that powers crucial operations such as the training and inference of AI models. This has helped Nvidia's revenue and net income soar in the triple digits in recent times and reach record levels. And it's also helped the shares to soar more than 240% over the past year.
Of course, rivals such as Advanced Micro Devices and Intel exist in this market, but so far Nvidia has shown it has what it takes to stay ahead. And at the company's GTC AI Conference this week, chief executive officer Jensen Huang announced product launches and updates that offer us reason to be optimistic.
NASDAQ: NVDA
Key Data Points
One particular bit of news was especially noteworthy, and that's the upcoming release of Nvidia's Blackwell architecture and chips. The platform, available later this year, will help customers run generative AI on large language models (LLMs) at a cost and energy consumption level 25 times lower than its predecessor.
Chief executive officers of the biggest tech companies from Meta Platforms to Tesla commented on the Blackwell announcement -- showing that they're on board to use the platform. "There is currently nothing better than NVIDIA hardware for AI," Tesla's Elon Musk said in Nvidia's Blackwell launch statement. And the biggest cloud companies said they're ready to make the technology available to customers.
All of this signals a new era of growth ahead for this chip giant, meaning that, trading at 36x times forward earnings estimates, Nvidia still looks like a buy today.
2. Amazon
Amazon (AMZN +0.26%) is a great tech stock to buy now because it's already benefiting and is set to benefit from three growth areas: e-commerce, cloud computing, and AI. The company is a leader in both e-commerce and cloud computing services, and it's investing heavily in AI to boost earnings in both of those businesses.
First, AI aside, Amazon has become an e-commerce giant and continues to build its position thanks to its Prime subscription service, offering members many benefits that keep them coming back. AI has the potential to lower Amazon's costs and improve the shopping experience for customers -- and that could translate into earnings growth. Amazon uses AI to streamline e-commerce operations, find the best delivery routes to shorten delivery times, and uses AI to help customers find the products they need. And these are just a few examples.
Through Amazon Web Services (AWS), the cloud business, Amazon offers a broad range of services to its customers, and these services include just about every aspect of AI: from chips to power the training of LLMs to a fully managed service that allows customers to customize top existing LLMs. Since AWS already is a cloud leader, chances are when its customers are interested in launching an AI project, they'll do that right there on AWS.
NASDAQ: AMZN
Key Data Points
So, Amazon is using AI to improve its operations and save time and money -- and it's selling AI services to customers. And this means it could score a double victory in the area of AI.
Considering this and Amazon's long track record of earnings growth, the stock, trading for 42x times forward earnings estimates, looks like one to buy hand over fist today.
