The "Magnificent Seven" grouping of stocks has been nothing short of magnificent in recent years. They represent seven of the biggest and most influential stocks in the S&P 500, and have been outperforming the broader index in a big way.
From 2016 through the end of 2025, the Magnificent Seven had a return of 875%, topping the S&P 500's return of 235%. You really couldn't go wrong with investing in any of these stocks over the last decade.
However, there are still some bargains to be had here. Two of the Magnificent Seven stocks are down more than 10% from their all-time highs, and appear to be great picks for investors looking to add high-quality names to their portfolios.
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1. Microsoft: Down 21% from all-time highs
Microsoft (MSFT 0.29%) is a dominant computer software company, best known for its Microsoft 365 suite of applications, including Word, Excel, Outlook, and PowerPoint. The company is a top cloud computing company through Microsoft Azure, and offers its Windows operating system, the Bing search engine, the Edge browser, Xbox gaming consoles, and the LinkedIn social network.
So, there's a lot going on with Microsoft, which is why revenue in the second quarter of fiscal 2026 (ending Dec. 31, 2025) was $81.3 billion, up 17% from a year ago. Net income was $38.5 billion and $5.16 per share, up from $24.1 billion and $3.23 per share a year ago.
NASDAQ: MSFT
Key Data Points
However, some analysts are concerned about the rate of Microsoft's spending on artificial intelligence (AI) and data centers. Microsoft reported spending $37.5 billion in the quarter. However, once the bottleneck on AI hardware eases, Microsoft will be in a position to grow even faster.
2. Tesla: Down 13% from all-time highs
Tesla (TSLA 2.57%) is in an interesting position because its primary product is electric vehicles (EVs), and that's a tougher industry to be in right now. Tesla is facing greater competition both domestically and in China, and sales are falling with the expiration of a $7,500 EV federal tax credit last year. Tesla delivered 418,227 vehicles in the fourth quarter of 2025, down from 495,570 vehicles in Q4 2024.
But Tesla's future lies elsewhere. CEO Elon Musk says the company will convert part of its Fremont, California, manufacturing plant to produce Optimus robots rather than its S and X model vehicles. Musk said the company will wind down production of those vehicles over the next several months, and it has a goal of churning out 1 million of its Optimus robots.
NASDAQ: TSLA
Key Data Points
Tesla is also making strides on its full self-driving technology, with the goal of not only producing Cybercab unmanned vehicles, but also to allow Tesla owners to monetize their vehicles as robotaxis. Musk said the company plans to have fully autonomous vehicles in as much as half the U.S. by the end of the year -- pending regulatory approval.
That's why analysts such as Cathie Wood and Dan Ives have been so bullish on Tesla stock. It has world-beating potential should Musk's vision comes true.
