It's been a strong year for some of the largest tech stocks, but not every bellwether is ringing the bell. Some of the "Magnificent Seven" stocks have been short on the magnificence. Amazon (AMZN -0.57%) and Apple (AAPL -0.81%) are trading lower in 2025 through Wednesday's close.
They're not down by much. Amazon is trading 1.7% lower, and Apple is off by a mere 0.4%. However, with the overall Magnificent Seven collection of stocks surging 18.7% in that time, the difference is substantial. Have they lost their way, or can they get back on track?
Let's take a closer look at Amazon and Apple as this year's Magnificent Seven stragglers.
1. Amazon
Amazon may have just completed its Prime Big Day Deals shopping event earlier this month, but the e-commerce pioneer itself isn't exactly in its prime right now. Net sales have clocked in between 9% and 12% for three consecutive years.
Most retailers would love to be growing at the pace, but we're talking about Amazon. Growth expectations are high for a company that has never delivered top-line jumps of less than 9% in its first 28 years on the market. Total net sales are up 11% through the first half of this year, so it doesn't seem as if a breakout is happening in 2025.
Amazon's latest quarter showed signs of life. Net sales rose 13%, its biggest year-over-year increase since the holiday quarter of 2023. Its international sales jumped 16%, even if that was partly enhanced by the falling dollar.
Its Amazon Web Services (AWS) cloud business soared 18%. AWS represents just 18% of Amazon's business right now, but it's a high-margin juggernaut that should help diversify from the highs and lows of e-commerce.
Image source: Getty Images.
With its high-margin workhorse once again growing faster than the business that most people know Amazon for, it's not a surprise that profitability is growing faster than net sales. Net income soared 33%, a chunky double-digit percentage that beat analyst expectations.
Shares are trading for less than 30 times next year's profit target. It's not cheap, but it's also not expensive if Amazon is starting to turn the corner. Wall Street pros are only modeling a 10% increase in net sales and a 15% move higher on the bottom line next year. It's a familiar pace for Amazon investors in recent years, but we saw how analysts underestimated the company in its previous quarter.
Amazon is holding up better than its negative year-to-date returns. If it's able to come through with another quarterly beat in two weeks, it should be able to join the rest of its Magnificent Seven peers in positive territory -- if it doesn't get above that chin-up bar before then.
2. Apple
Apple began the year as the country's most valuable company by market cap, hitting an all-time high on the final trading week of 2024. These days, Apple has to settle for the bronze, lapped by both Nvidia and Microsoft earlier this year. It's not a race, but there isn't a lot of pep to Apple's step these days.
The class act of Cupertino had treated its shareholders to a steady growth cadence, fueled by its revolutionary iPhone. Sales would spike when its flagship phone had an evolutionary upgrade every three years, only to meander in the single digits in the other two fiscal years. This played out for several cycles, but see if you can spot a problematic disruption to the trend lately.
Apple's fiscal year ends in September. Here's how its net sales played out over the past few fiscal years since Steve Jobs left us in 2011.
- 2012: 45%
- 2013: 9%
- 2014: 7%
- 2015: 28%
- 2016: (8%)
- 2017: 6%
- 2018: 16%
- 2019: (2%)
- 2020: 6%
- 2021: 33%
- 2022: 8%
- 2023: (3%)
- 2024: 2%
- 2025: 6% (through the first three fiscal quarters)
Analysts see Apple clocking in with 7% year-over-year quarterly revenue growth when it reports fiscal fourth-quarter results on Oct. 30. This will stretch its streak of single-digit positive or negative growth to 15 quarters. Perhaps even more troublesome, it will another year without double-digit growth on the top line.
Investing in Apple isn't easy. The market is bracing for net sales to rise just shy of 6% for the fiscal 2026 year that kicked off earlier this month. This would translate into a five-year drought of double-digit jumps for Apple, after consistently delivering no more than back-to-back years of single-digit percentage moves.
Apple was supposed to wean investors off the cyclical ups and downs of head-turning iPhone releases. This was going to be a services-driven company, fueled by its expanding audience. The material growth just hasn't been there.
Making matters worse, the goal of achieving bottom-line jumps on high-margin services revenue has also fallen short. Earnings from continuing operations over the trailing 12 months is flat with where it was three years ago.
Apple needs a hit, and it didn't get there with its big-ticket Vision Pro headset. Its promise to inject artificial intelligence (AI) into its phones hasn't delivered or impressed the market.
With Apple trading for more than 30 times forward earnings estimates, it's not as if today's buyers can say that they're bargain hunting. Amazon is the better play for investors among the Magnificent Seven laggards right now.
