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

Keith Speights, The Motley Fool

Mon, Apr 14, 2025, 1:51 AM 4 min read

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%.

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.

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).

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.