3 Beaten-Down "Magnificent Seven" Stocks to Buy and Hold

If you look up "magnificent" in a dictionary, you'll probably find definitions such as impressive, striking, or excellent. Those words capture the essence of what magnificent means.

But they don't apply to the so-called "Magnificent Seven" stocks these days. The tariff-fueled market sell-off has caused all seven stocks in the group to plunge by double-digit percentages. All but one dropped more than 20%.

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However, don't dismiss the possibility that some or all of these stocks could return to magnificence in the future. Here are three beaten-down Magnificent Seven stocks to buy and hold.

1. Alphabet

Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) appears to be in a strong position to weather the current storm. The company raked in $350 billion in revenue last year with profits topping $100 billion. Its cash position is nearly $96.7 billion.

Alphabet makes most of its money from advertising on Google Search and other apps. It would feel some pain if the economy enters a recession, with advertising revenue likely declining. However, this business should be resilient.

I don't subscribe to the theory that generative AI presents an existential threat to Google Search. So far, the incorporation of generative AI into the search engine via AI Overviews has increased search volume and user satisfaction.

Generative AI (and other types of AI as well) should continue to provide a massive tailwind for Google Cloud. This unit is already the fastest-growing major cloud services provider. I expect Google Cloud will become an increasingly important profit engine for Alphabet.

Don't overlook Alphabet's vaunted "other bets" either. I'm especially optimistic about the prospects for the company's self-driving car business, Waymo. If the autonomous ride-hailing market takes off like some predict, Waymo should be a huge winner for Alphabet's shareholders (whether it remains part of the company or is spun off as a separate entity).

2. Amazon

It's the same song but a different verse with Amazon (NASDAQ: AMZN). As was the case with Alphabet, Amazon's financials are impressive. The company generated nearly $638 billion in revenue in 2024. Its profits totaled $59.2 billion. Amazon's cash stockpile is over $101 billion.

E-commerce sales could take a hit in a significant economic downturn. However, Profitero has ranked Amazon as the lowest-priced online U.S. retailer for eight consecutive years. Penny-pinching consumers could turn to Amazon before they shop elsewhere.

Over the long run, though, Amazon's e-commerce should continue to grow and become more profitable as the company uses technology to increase operational efficiency.

Amazon's key growth driver is Amazon Web Services (AWS). It's the largest cloud services provider on the planet. As more organizations adopt AI and shift their apps and data to the cloud, AWS will almost certainly be a key beneficiary.

I think Amazon's expansion into healthcare, satellite broadband services, and self-driving cars will pay off. The company will also keep looking at new growth areas in the future, just as it has done in the past.

3. Meta Platforms

Meta Platforms (NASDAQ: META) might not stack up financially against Alphabet and Amazon. However, the company's 2024 revenue of $164.5 billion and earnings of $62.4 billion aren't too shabby. Neither is Meta's cash position of $77.8 billion.

Sure, Meta's advertising revenue could dip if a recession comes. But companies will still need to market their products. I suspect the 3.35 billion people active daily on Meta's Facebook, Instagram, Messenger, and WhatsApp applications will be too alluring for advertisers to ignore.

The company is using AI to better monetize its social media apps. CEO Mark Zuckerberg has predicted business messaging using AI assistants will be the "next major pillar" of Meta's business.

I think Meta is poised to be a leader in another important AI market, too: smart glasses. Zuckerberg said in the company's fourth-quarter earnings call that "glasses are the ideal form factor for an AI device." He's probably right. Meta's Ray-Ban AI glasses give it a solid launching pad, in my view.

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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. Keith Speights has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.