3 "Magnificent Seven" Stocks That Will Crush the Market

A couple of years ago, the chief investment strategist at Bank of America Global Re -- a fellow by the name of Michael Hartnett -- borrowed the title of a classic film to identify a hot new group of stocks that had been lifting the entire U

Market on their shoulders throughout the early 2020s: the "Magnificent Seven. " That group includes: Nvidia (NVDA 1. 28%) Microsoft (MSFT 1. 58%) Apple (AAPL 0. 53%) Amazon (AMZN 1. 62%) Alphabet (GOOG 0. 51%) (GOOGL 0. 54%) Meta Platforms (META 0. 73%) Tesla (TSLA 0. 04%) Moving forward, I expect some of these stocks will be less dominant than they were when Hartnett labeled them, but I still think a few could easily outperform the market: Nvidia, Alphabet, and Meta Platforms

While there will ly be some other strong performers in the "Magnificent Seven," these three are my top picks

Image source: Getty Images

Nvidia At this time, Nvidia is the world's largest company by market cap, and it rose to that position thanks to the incredible growth of its graphics cessing unit (GPU)

GPUs are designed to handle specific types of computationally intense cessing tasks that can be easily broken down into a slew of smaller ones that can be solved simultaneously, rather than in sequence

As it happens, AI model training and inference are heavy on just those types of tasks, so the growing use of AI has driven a surge in demand for GPUs

And as Nvidia makes some of the most powerful ones -- and certainly the most ones -- its revenue increased rapidly over the past few years

NVDA Revenue (TTM) data by YCharts

That growth is far from over

There has never been a company of Nvidia's size dering such rapid growth, and it has pretty much defied all investment notions large companies not being able to grow rapidly

There are no signs of the AI infrastructure build-out slowing, which means more and more Nvidia GPUs will be used

This is an incredibly bullish time for Nvidia, and I believe it will continue to outperform the market

Alphabet Alphabet is on the opposite side of the AI from Nvidia

Many investors expect that generative AI systems will replace Google's engines, but that hasn't happened

Furthermore, Alphabet has already deployed its AI overview tool in a bid to supplement its results, and that will ly be sufficient for many average users' needs

Due to the market's current aversion to Alphabet's stock, it trades at a significant discount to many of its major peers

GOOGL PE Ratio (Forward) data by YCharts. 6 times forward earnings, Alphabet stock is far cheaper than most of its big peers, which trade around 30 times forward earnings

I believe Alphabet's stock will gain more respect from the market as it continues to der solid results quarter after quarter

This should cause the valuation to rise, dering holders market-crushing returns

Meta Platforms Meta Platforms is bably better known by the social media platforms under its umbrella: Facebook, Instagram, WhatsApp, Threads, and Messenger

These platforms generate revenue by selling advertising space, and Meta is significant resources to ensure that its ad tools are best in class

With its top-notch tools and platforms, Meta vides some of the best returns on investment in the advertising space, making nearly every on Earth a potential customer

Moreover, Meta is working on an AI tool that will take information from a its offerings and its target audience, and create an ad campaign for it

It's also utilizing AI to enhance content and line operations

It has been no secret that Meta Platforms is offering substantial signing bonuses to the top AI engineering talent available, and I believe this is an excellent strategy for Meta to utilize its vast resources in assembling a dream team

This could pay off significantly in the next few years as AI tools become more widespread and Meta is recognized as a leader in its space

I believe that the value Meta will der to holders over the next few years, due to its significant AI investments, will be substantial and lead to a market-crushing stock

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors

Keithen Drury has positions in Alphabet, Amazon, Meta Platforms, Nvidia, and Tesla

The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla

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