"Magnificent Seven" Makeover: Which Stocks Have Earned a Spot, and Which Haven't?

The so-called "Magnificent Seven" stocks -- Alphabet, Apple (AAPL 0. 75%), Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla (TSLA 0. 25%) -- vided much of the driving force behind the market's strong growth over the past several years

Here's why it should be out with the old and in with the new when it comes to the Magnificent Seven

The reason for Apple's price underperformance is that its revenue growth has slowed to a glacial pace, and investors' hopes for a strong smartphone upgrade cycle driven by its artificial intelligence (AI) offerings have faded

A big part of Apple's issues is that it has not innovated

It has had no new breakout ducts in the last several years, and the company is behind in AI

While Apple dedicated a lot of resources to AI, it has thus far very little to show for it

Apple Intelligence's introduction did little to convince most users to upgrade their iPhones, and it hasn't even launched Apple Intelligence in China yet

The Chinese market, meanwhile, remains a consistent weak spot for the company

Apple is losing smartphone market to local rivals, and its revenue in the country has been on the decline

Xiaomi and Huawei have both launched smartphones to compete at the high-end of the market, and Apple has been forced to roll out sales incentives in China to try to spur demand

For a company that built its reputation not just as a nology company but as a luxury brand, that's a difficult path to go down

Apple has been generating solid growth in its high-margin services, but it faces a unique risk: It is possible that regulators and the courts may force Alphabet to end the deal that makes Google the default engine on Apple devices

Any change to the deal could result in a big hit to its earnings

Tesla looks to be in trouble Tesla, meanwhile, has its own blems

Its electronic vehicle (EV) deries and revenue fell last year, and it looks things are getting worse

Increased competition (especially in China) and the rising ity of hybrid vehicles have played roles in Tesla's struggles, but some of the blame can also be pinned directly on the actions of CEO Elon Musk

Musk's support and financial backing of President Donald Trump and various Republicans in recent elections, and the subsequent leadership role he took on at Trump's "Department of Government Efficiency" (DOGE) have angered a lot of current and potential vehicle buyers

The constituencies Musk angered have political views that generally make them more ly to buy EVs than the demographic that supports President Trump

Musk's political actions led to tests and boycotts of Tesla in the U

And in several European countries where Tesla operates

More recently, Musk has become an outspoken critic of Trump's legislative efforts, irritating the president and his supporters

Musk even went so far as to threaten to start his own political party, potentially alienating all sides of the political spectrum

Not surprisingly, Tesla sales have been sinking in the U. , Europe, and China

Tesla bulls are still betting that its robotaxi will be a game changer

However, the recent pilot launch of the service in its first city has been met with skepticism and some well-documented potential safety issues

Meanwhile, Alphabet's Waymo has established the early lead in the driverless ride-sharing race

Time to add Palantir In my opinion, two of the best stocks to replace Apple and Tesla in the Magnificent Seven would be Palantir and Broadcom, both of which have had strong starts to the year

Palantir has become a growth machine

The greatest contributor to that growth was its largest customer -- the U

Commercial customers grew at an even faster rate, but from a smaller base

Meanwhile, it recently landed a significant contract with NATO, showing that international defense has the potential to become a third meaningful growth pillar for the company

Much of Palantir's success stems from its Artificial Intelligence Platform (AIP), which it is positioning to be an AI operating system for its clients

AIP gathers data from various sources and puts it into an "ontology" that connects digital assets with their real-world counterparts, allowing organizations to use AI to help solve their real-world blems

The platform is already being used by clients across a wide swath of industries to manage an array of different issues, and the opportunities for it appear to be huge

Meanwhile, Palantir recently introduced new agentic AI tools that not only suggest actions but can also carry them out

Why Broadcom belongs Broadcom has also been seeing solid growth

The growth is being led by its AI networking portfolio, where it vides networking components such as Ethernet switches, optical receivers, DSPs, and NICs -- critical hardware for moving huge amounts of data across AI clusters

However, Broadcom's biggest opportunity lies in custom AI chips

The company helps customers design application-specific integrated circuits (ASICs) that can be used to power AI workloads

After its success in helping Alphabet design its tensor cessing units (TPUs), Broadcom has been gaining more and more new custom AI chip customers

Three of its hyperscaler customers are well advanced in the ASIC design cess, and Broadcom has stated that each one of them intends to deploy fabrics of 1 million AI chip clusters in 2027, representing a total serviceable opportunity for the company of $60 billion to $90 billion in that year alone

That's a huge opportunity, and it doesn't even include Broadcom's newer customers, such as Apple

Given the growth opportunities ahead for both Broadcom and Palantir, they look today better candidates than Apple or Tesla to form a new and imved Magnificent Seven

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

Bank of America is an advertising partner of Motley Fool Money

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

Geoffrey Seiler has positions in Alphabet

The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Bank of America, Meta Platforms, Microsoft, Nvidia, Palantir nologies, and Tesla

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