2 ‘Magnificent Seven’ stocks to buy before they surge as much as 71%, according to select Wall Street analysts

The rise of artificial intelligence (AI) since the beginning of last year has been nothing short of phenomenal. The potential applications of generative AI continue to skyrocket, and it has become clear that companies on the cutting edge of this technology can benefit from early adoption.

Leading the pack is the so-called “Magnificent Seven” group of companies that have significantly outperformed the broader market since the advent of AI early last year (in order of returns, at the time of writing):

• Nvidia (NVDA 3.37%): 700% increase
• Metaplatforms (META 1.74%): 379% increase
• Tesla: 120% increase
• Amazon: 109% increase
• Alphabet: 89% increase
• Microsoft: 75% increase
• Apple: 74% increase

To put these gains in the context of the overall market, S&P500 it increased by 49% during this time, so the difference is clear.

It should come as no surprise that each of these companies is a leader in the implementation and development of artificial intelligence. What’s surprising is that the growing chorus on Wall Street – which rarely agrees on anything – does almost universal, supporting several of these actions. According to selected Wall Street analysts, despite triple-digit gains, two of them still have a significant lead ahead.

Platform Meta: Suggested increase 41%

The first company with great growth potential is Meta Platforms. The social media specialist recently highlighted the enormous potential of generative AI, but the company has a long history of developing and implementing cutting-edge algorithms.

Meta has a treasure trove of user data from multiple social media sites, which provides the information necessary to develop its own large language models that form the basis of generative artificial intelligence. While the company doesn’t have its own cloud infrastructure service to monetize LLaMA’s AI, Meta makes its AI models available on its rivals’ cloud platforms – for a fee.

The company derives the lion’s share of its revenue from ads displayed on its social media platforms. To this end, Meta has also developed a set of tools to help these advertisers succeed by helping to secure their share of ad spend.

Despite a significant 379% share price gain since the beginning of last year (as of this writing), Wall Street remains significantly behind the Meta. Just last week, Rosenblatt Securities analyst Barton Crockett set a top price target of $811 and a Buy rating. This represents a potential increase of 41% compared to Tuesday’s closing price.

Crockett believes that Meta’s unparalleled spending on virtual reality, augmented reality and the Metaverse is a strength rather than a weakness. It gives the company “the ability to make effective price/performance choices.” It notes that Meta “uniquely delivers category products that can be characterized as leading in terms of consumer adoption.” He is also impressed by Meta’s latest achievements in artificial intelligence.

The analyst is not the only one who is optimistic about Meta. Of the 64 analysts who analyzed the company’s stock in June, 56 rated it as a buy or strong buy, and nothing recommends selling. Moreover, Meta trades for just 29 times earnings, a discount to a multiple of 30 for the S&P 500.

Meta boasts over 3.2 billion users who visit its social media platforms every day, providing the company with a constant flow of relevant data. It is the world’s second-largest digital advertiser, providing the company with strong cash flow to pursue its AI ambitions.

Add to this the opportunities presented by artificial intelligence, and it’s no wonder that Wall Street is delighted with Meta.

Nvidia: suggested increase of 71%

The second Magnificent Seven company with huge potential is Nvidia. The chip specialist has been one of the biggest beneficiaries of the AI ​​revolution as its graphics processing units (GPUs) made the technology possible. Nvidia processors have long been the gold standard in video games, cloud computing, data centers and other forms of artificial intelligence. The emergence of generative artificial intelligence in early 2023 resulted in triple-digit growth in revenues, earnings, AND share price.

It’s easy to see why. According to data collected by Jon Peddie Research, Nvidia is the undisputed leader in the discrete desktop graphics processor segment, controlling 88% of the market. According to analytics firm TechInsights, the company continues to dominate the data center GPU market, reaching an astonishing 98% of the market last year. As if that wasn’t enough, according to analyst firm CB Insights, Nvidia dominates the machine learning market – an earlier branch of artificial intelligence – with 95% of that market. This helps illustrate that when it comes to the data center and artificial intelligence market, Nvidia is the undisputed leader.

Despite share prices rising around 700% since the beginning of last year (as of this writing), Wall Street remains focused on Nvidia. Rosenblatt analyst Hans Mosesmann maintains a buy rating and the highest price target for the company’s shares at $200. This represents a potential increase of 71% compared to Tuesday’s closing price.

Mosesmann believes the chipmaker’s software that complements and accelerates its industry-leading processors doesn’t get enough recognition. “We anticipate this aspect of software to grow significantly over the next decade in terms of overall sales mix, with an upward trend in valuations for sustainability reasons,” Mosesmann wrote.

The analyst isn’t the only one optimistic about Nvidia. Of the 60 analysts who issued an opinion on the stock in September, 55 rated the stock as a buy or strong buy, and nothing recommends selling.

While some investors may be wary of Nvidia’s valuation, this view is myopic. For Nvidia’s fiscal 2026, which begins in February, analyst consensus is for earnings per share of $4.02. At the current share price of $117, that works out to roughly 29 times forward earnings, which is lower than the current multiple of 30 for the S&P 500.

Given the company’s industry dominance and cutting-edge technology, I think this is definitely a bargain.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Randi Zuckerberg, former chief market development officer and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an Alphabet executive, is a member of The Motley Fool’s board of directors. Danny Vena holds positions at Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool covers and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool recommends the following options: long $395 Microsoft calls in January 2026 and short $405 Microsoft calls in January 2026. The Motley Fool has a disclosure policy.