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1 "Magnificent Seven" Stock That's a Better Buy Than the Other 6 Right Now

newsfeedback@fool.com (James Brumley)
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⚡ Quantum Brief
Microsoft leads the "Magnificent Seven" in 2026 declines, dropping 23% YTD and 32% since October, making it the worst performer but potentially the most undervalued. Analysts argue investors wrongly penalized Microsoft as a proxy for broader AI frustration, overlooking its long-term positioning in the AI "super cycle" despite short-term market impatience. Benchmark’s Yi Fu Lee calls selling Microsoft "shortsighted," emphasizing its AI investments are strategic for future dominance, not immediate returns. Bank of America highlights Microsoft’s dual advantage: cloud infrastructure (Azure) and AI-integrated productivity tools (Office 365), creating a unique ecosystem for enterprise and consumer adoption. While no rebound is guaranteed, patience may reward investors as Microsoft’s fundamentals—$2.8T market cap, 68% gross margins, and 0.94% dividend—remain strong amid temporary AI skepticism.
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By James Brumley – Apr 13, 2026 at 7:20AM ESTKey PointsThe worst performer of the bunch is also the most attractive prospect right now, although not solely due to this discounted price.Investors as a group punished one particular name as a proxy for their generalized frustration in AI’s lack of revolutionary change so far.More and more analysts are voicing bullishness based on the market’s misguided assumption that this familiar name isn’t an overly relevant artificial intelligence player.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 0.60%). 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. ExpandNASDAQ: MSFTMicrosoftToday's Change(-0.60%) $-2.25Current Price$370.82Key Data PointsMarket Cap$2.8TDay's Range$370.03 - $375.6352wk Range$355.67 - $555.45Volume7.9KAvg Vol37MGross Margin68.59%Dividend Yield0.94% 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.Read NextApr 12, 2026 •By Keithen DruryThis Is How Microsoft Is Making Money from AI Right NowApr 12, 2026 •By Parkev Tatevosian, CFAMicrosoft Stock Analysis: Buy the Dip?Apr 12, 2026 •By Keithen DruryThe Best Way to Invest in OpenAI and ChatGPT Before Its IPOApr 11, 2026 •By Prosper Junior BakinyHere's My Top Artificial Intelligence (AI) Stock for Retirees (Hint: It's Not Nvidia)Apr 9, 2026 •By Reuben Gregg BrewerPrediction: Cybersecurity Spending Will Be Recession-Proof in 2026. Here Are 2 Stocks to Buy.Apr 9, 2026 •By Stefon WaltersIf I Had $5,000 to Invest in Artificial Intelligence (AI) Right Now, I'd Buy These 2 Stocks Before They ReboundAbout the AuthorJames Brumley is a contributing Motley Fool stock market analyst covering consumer staples and consumer discretionary stocks. James is a former licensed stockbroker with Charles Schwab, and a registered investment adviser. He holds a bachelor’s degree in business management with a specialization in finance from Transylvania University.TMFjbrumleyX@jbrumleyStocks MentionedMicrosoftNASDAQ: MSFT$370.87(-0.59%)-$2.20*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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