2 "Magnificent Seven" Stocks Down Between 10% and 23% to Buy Right Now

Nvidia, Alphabet, Apple, Microsoft (MSFT 1.40%), Amazon (AMZN 1.97%), Meta Platforms, and Tesla – collectively known as the “Magnificent Seven” – have captured the stock market’s spotlight in recent years. And for good reasons, as these megacap growth stocks have been major contributors to major index gains.

As recent research by The Motley Fool shows, the Magnificent Seven’s combined market cap of roughly $21.8 trillion accounts for roughly a third of the S&P 500 (^GSPC 1.74%). Meaning that just a handful of stocks are now so large they can move the market. But concentration is a double-edged sword.

In 2026, index investors have been getting the unfavorable side, as all of the Magnificent Seven stocks are trading down year to date and underperforming the S&P 500.

Here’s why two longtime Motley Fool contributors see Microsoft and Amazon as standout buys right now.

Image source: Getty Images.

Microsoft is too cheap to ignore

**Daniel Foelber (Microsoft): **Microsoft is the worst-performing Magnificent Seven stock in 2026 so far – down 23.4% year to date and 31.7% from its all-time high from last summer.

Data by YCharts.

The stock is under pressure for some valid and some arguably overblown reasons. Microsoft is the world’s largest software stock by market cap. And software stocks are under immense pressure as investors question the impact of artificial intelligence (AI) on established application software tools. But Microsoft isn’t an ordinary software company.

The Microsoft 365 suite is deeply embedded in the enterprise, household, and educational markets. Microsoft is also so much more than just software. It is the No. 2 cloud infrastructure player behind Amazon Web Services. And it has a massive consumer electronics division – from personal computers to gaming, and more. It also owns LinkedIn. And Microsoft-owned GitHub is rapidly growing its paid Copilot subscribers – proving that Microsoft is monetizing AI across its business segments.

Microsoft is generating solid revenue growth, impeccable earnings, and decade-high operating margins. But some investors are concerned that hyperscalers like Microsoft are overspending on AI. Microsoft hasn’t shied away from the impact of this spending.

During its second-quarter fiscal 2026 earnings call in January, Microsoft said roughly two-thirds of its $37.5 billion in quarterly capital expenditures is spent on short-lived assets such as graphics processing units and central processing units. The higher spending weighed heavily on Microsoft’s free cash flow, which was just $5.9 billion in its latest quarter, which ended Dec. 31, 2025, and has been steadily trending down as Microsoft builds out its AI data center infrastructure.

The software and AI spending narratives are dragging down the stock, but the bigger concern may be OpenAI.

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NASDAQ: MSFT

Microsoft

Today’s Change

(-1.40%) $-5.18

Current Price

$365.86

Key Data Points

Market Cap

$2.8T

Day’s Range

$365.19 - $374.69

52wk Range

$344.79 - $555.45

Volume

1.8M

Avg Vol

35M

Gross Margin

68.59%

Dividend Yield

0.94%

Microsoft has invested heavily in OpenAI, whose model powers its Copilot AI tools. But Anthropic’s Claude has proved to be a formidable alternative to OpenAI’s ChatGPT. And in many ways, Claude has overtaken ChatGPT in key areas like coding – with reports indicating that Claude is now the No. 1 downloaded app in the U.S. as of early March. Claude taking market share from OpenAI, or at least slowing its growth rate, is a risk to Microsoft, considering that 45% of its $625 billion backlog is tied to OpenAI.

Those are the risks to Microsoft’s investment thesis. The good news is that they could be entirely overblown if Microsoft’s software suite remains relevant and its long-term investments pay off. And best of all, Microsoft is so cheap that these risks are already baked into its valuation.

Microsoft sports a price-to-earnings (P/E) ratio of just 23.3 and a forward P/E of 22.3 compared to a 10-year median P/E of 33.2. Microsoft also has the highest dividend yield of the Magnificent Seven at 1% and the best dividend track record – with 16 consecutive years of boosting its payout.

Add it all up, and investors are getting what could turn out to be a great buying opportunity in Microsoft.

Amazon’s $200 billion bet looks familiar

Anders Bylund (Amazon): As I write this on March 24, Amazon shares are down 10.3% since the New Year’s fireworks. To be clear, I mean the usual holiday celebrations, as Amazon shares slumped at the end of 2025 – no fireworks there. By the end of the year, Amazon’s stock was already down 9% from November’s all-time high. Altogether, Amazon investors have taken an 18.5% hit over the last five months.

But there’s nothing wrong with Amazon’s business. The market is punishing this habitual innovator for investing in future growth drivers. You know, just like it did when Amazon evolved from an online bookstore to a wide-ranging retailer. Or when it invested billions in a two-day shipping system (which moved on to next-day and same-day deliveries). Or the early years of Amazon Web Services (AWS), when cloud computing really wasn’t a thing yet, and the new idea looked like a distraction from Amazon’s core e-commerce business.

The skeptics turned out to be wrong most of the time. As a result, Amazon has crushed the market in the long run. If you invested a measly $1,000 in the stock 20 years ago, your position would be worth $118,000 today. Putting the same cash to work in an S&P 500 index fund instead would only have given you $7,293 over the same period. It’s not a close race.

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NASDAQ: AMZN

Amazon

Today’s Change

(-1.97%) $-4.16

Current Price

$207.55

Key Data Points

Market Cap

$2.3T

Day’s Range

$207.12 - $212.89

52wk Range

$161.38 - $258.60

Volume

2M

Avg Vol

49M

Gross Margin

50.29%

This time, people worry about a massive investment in AI infrastructure. The company will pour $200 billion into capital expenses this year, largely to build more AI data centers.

That may sound reckless. Amazon’s capital expenses averaged $44 billion over the last decade, so it’s a big step up. But it’s also a natural progression from investing $52.7 billion in 2023, $83 billion in 2024, and $131.8 billion last year. Furthermore, Amazon is pursuing this market for good reasons.

Here’s what Amazon CEO Andy Jassy said in the Q4 2025 earnings call:

Customers really want AWS for core and AI workloads. And we are monetizing capacity as fast as we can install it. We have deep experience understanding demand signals in the AWS business and then turning that capacity into strong return on invested capital. We are confident this will be the case here as well.

So the stock is down because people think Amazon’s AI ramp-up is too expensive. In my experience, this company has a tendency to back up its big, costly plans with serious business results. I see this price drop as a buying window and a rare setup. If Amazon’s track record of turning skepticism into market-beating returns doesn’t make this dip look like an opportunity, I’m not sure what would.