Explore the Magnificent Seven Stocks Now, a Unique Artificial Intelligence (AI) Buying Opportunity

The actions of the “Magnificent Seven” are not unrelated to artificial intelligence (AI). These technology leaders have invested in the field either to improve their internal processes or to develop products. The “Magnificent Seven,” a reference to the 1960s western, dominated the Nasdaq and S&P 500’s gains last year, and most continue to soar this year as well – thanks to their long-term prospects promising.

But just one of these top stocks currently represents a once-in-a-generation AI buying opportunity. The company benefits from AI in two ways: by using AI itself and by selling AI tools. This innovator is already generating revenue from its investments in AI and aims to play a central role in the development of this hot technology. The company has a long history of profitability and, given all its positives, is trading at a bargain price today, providing investors with a unique buying opportunity. Let’s find out more.

Image source: Getty Images.

A leader in two high-growth areas

First, a quick look at the Magnificent Seven company list. They understand Amazon (AMZN 0.03%), Apple, Alphabet, Microsoft, Metaplatforms, NvidiaAnd You’re here, and each offers interesting growth prospects. The unique buying opportunity, however, is Amazon, a leader in the two high-growth areas of e-commerce and cloud computing – and a potential powerhouse in AI.

Amazon has already begun to reap the rewards of its early investments in AI, reporting an annualized run rate of more than $100 billion for its cloud business, Amazon Web Services (AWS). AWS focuses on AI, offering a wide variety of products and services for each “layer” of AI needs.

For example, AWS offers a wide range of chips – from Nvidia’s to its own cheaper chips for cost-conscious customers – for companies training extended language models (LLMs). For customers who don’t want to start from scratch, Amazon offers a fully managed service that allows them to customize the best LLMs for their own projects. Finally, Amazon also creates AI applications such as Amazon Q, a generative AI assistant for software developers.

And AWS is well-positioned to attract AI companies since it is the world’s leading provider of cloud services. So it already has a large audience ready to learn more about its latest products and services.

“We are optimistic that much of this world-changing AI will be built on AWS,” CEO Andy Jassy wrote in his recent letter to shareholders.

The early days of revolutionary technology

And that brings me to the topic of the unique investment opportunity: investing in a key player in the early days of AI. Amazon says that currently, at least 85% of IT spending is on-premises. As this moves to the cloud, Amazon stands to benefit in a major way. Additionally, generative AI projects that will be built directly on the cloud over the next 20 years could contribute even more to growth, the company predicts.

It’s important to remember that Amazon also benefits from AI by applying these tools to its own business to reduce costs and save time. For example, the company’s robotics team builds AI models to perform various tasks, including handling workflow bottlenecks.

Today, Amazon shares trade at about 41x forward earnings estimates, up from about 55x at the end of last year. At the same time, the company’s recent earnings reports provide reason to be optimistic about the future. In the most recent quarter, sales grew by double digits, net income more than tripled, and AWS’s sales and operating income soared as customer budgets improved and demand for AI was increasing. Analysts’ annual growth estimates for Amazon over the next five years are also positive, topping 30%.

All of this makes Amazon an exceptional long-term buying opportunity right now – and one you may only encounter once in a generation.