2 Best “Magnificent Seven” Stocks to Buy in March

AI can be as transformative for the world as the internet was, which gave birth to or facilitated the growth of the so-called Magnificent Seven, making it a critical factor to consider.

| More on:
four people hold happy emoji masks

Source: Getty Images

Every country has its own set of publicly traded giants that may or may not be confined to a single sector, like Canada’s Big Six from the banking sector.

But the American Magnificent Seven — i.e., the seven stocks that have outstripped the S&P 500 by a massive margin and have emerged as trillion-dollar giants — are not even confined to a country’s stock market. They are giants around the globe and among the most sought-after investments in the world.

Another thing common in the Magnificent Seven, or at least three of the Magnificent Seven, is that they are essentially internet companies. And now that another technology (artificial intelligence — AI) that is just as disruptive and may become just as big over time has emerged, at least two of the magnificent seven may experience another strong bull market.

A software company

Microsoft (NASDAQ:MSFT) was a tech giant even before the dawn of the internet. It rode on the popularity of one of the most widely used operating systems for personal computers. Despite several powerful alternatives joining the market, it still dominated the personal computing arena, at least until smartphones became the personal computing device of choice.

However, Microsoft is emerging as a leader in the field of AI, mostly through its stake in OpenAI, which is an early bird in AI and the company behind the most widely recognized AI tool in the world — ChatGPT.

It has been one of the primary catalysts behind Microsoft’s rapid growth in the past few years, bringing its five-year total to an impressive 250% (almost). Considering how rapidly the demand for AI is growing, just one more product, like ChatGPT from OpenAI, may propel Microsoft ahead at an even more rapid pace.

A hardware company

Even though its origins are in gaming hardware, Nvidia (NASDAQ:NVDA) is also currently riding the AI hype train thanks to its Graphics Processing Units (GPUs).

These GPUs tend to be much faster and far more efficient in parallel processing thanks to their numerous cores compared to CPUs, which makes them ideal for specific use cases. Up until a few years ago, the most prominent use case was crypto mining. Now, it’s training AI and Machine Learning (ML) models.

From individual developers to businesses, a wide variety of entities are investing heavily in Nvidia chips for the computing power they need to train and run their own AI models. It has also triggered a secondary business, where a company may invest in a fleet of Nvidia cards and then offer slices of this computing power to the market.

This has allowed Nvidia’s stock to grow at a rapid pace. It rose over 270% in just the last 12 months, which is more growth than Microsoft achieved in the last five years.

Foolish takeaway

It wouldn’t be fair to pin the desirability of these two tech stocks primarily on AI. They have several fundamental strengths of their own, and both were leaders in their respective spheres even before the current AI wave.

However, it’s certainly the most significant catalyst for the future growth of these stocks, making them the best of the Magnificent Seven to consider in March.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Microsoft and Nvidia. The Motley Fool has a disclosure policy.

More on Tech Stocks

falling red arrow and lifting
Tech Stocks

Is Shopify a Buy, Sell, or Hold?

Shopify (TSX:SHOP) stock has been pulling back of late, opening up a window for dip buyers.

Read more »

Different industries to invest in
Tech Stocks

2 No-Brainer Growth Stocks to Buy Now With $2,000 and Hold Long Term

These growth stocks have already proven their worth this year, but are solid investments for long-term holders as well.

Read more »

woman data analyze
Tech Stocks

1 Stock That’s Just as Hot as Nvidia (Without All the Hype)

Nvidia (NASDAQ:NVDA) stock has surged in share price, but so has this stock, with a far lower share price to…

Read more »

Index funds
Tech Stocks

Constellation Software Stock: Buy, Sell, or Hold?

Unveiling the Code: Should you Buy, Hold, or Sell Constellation Software (TSX:CSU) stock at current levels?

Read more »

A plant grows from coins.
Tech Stocks

Got $5,000? These Are 2 of the Best Growth Stocks to Buy Right Now

Growth investors should have these two tech stocks high up on their watch lists.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Tech Stocks

Well Health Stock Is Down 58% From its Highs – Time to Buy?

Well Health stock has been hit, but the company remains on a path of record-breaking revenues as it approaches positive…

Read more »

Business man on stock market financial trade indicator background.
Tech Stocks

TFSA: The Most Expensive Stock in Canada Is a Top Buy Today

CSU stock (TSX:CSU) may be the priciest stock on the TSX today, but there is a very good reason for…

Read more »

TFSA and coins
Dividend Stocks

TFSA: Invest $15,000 in CSU Stock and Get $4,694 in Passive Income

CSU stock (TSX:CSU) has surged in the last year, yet even if growth slows by half, you could create immense…

Read more »