Despite their poor collective performance of late, all seven of the so-called "Magnificent Seven" stocks are still solid long-term buys.
If you've only got room for one of them in your portfolio right now, however, it arguably should be Microsoft (MSFT 1.13%). Here's why.
The bullish argument(s) for Microsoft
Yes, shares of the software giant are down more than any of the other six Mag-7 stocks. Year to date, this ticker's down just over 23%, just edging out Tesla in the proverbial race to the bottom. Since October's peak, Microsoft is down nearly 32%, leading this group lower for the same time frame.
NASDAQ: MSFT
Key Data Points
It's not just this big sell-off that makes Microsoft such a compelling prospect right now, however. That's certainly part of the bullish argument. But, as Benchmark analyst Yi Fu Lee notes, "We believe it is very shortsighted for investors to walk away from Microsoft as the AI investments made today are part of the longer-term strategy to position the company as a relevant player in the AI super cycle adoption wave."
Image source: Getty Images.
And he's right. Microsoft stock's recent performance has mostly been an indictment of the lack of meaningful change the overall artificial intelligence revolution has actually produced so far. But, the AI movement was never going to be a quick overhaul.
Moreover, as Bank of America's Tal Liani recently highlighted, Microsoft is uniquely positioned as a cloud infrastructure service provider on the back end and a productivity software service provider on users' side of the table. Both can and will (and are) readily integrating AI into their solutions.
More than enough
Guarantees? No, there's no such thing in this business. And there's certainly no guarantee this stock's going to start performing better in the immediate future. That's really up to still-fickle investors.
If you can just be patient, though, Microsoft's apt to get back to its usual fighting form soon enough.
