The “Magnificent Seven” tech stocks are known for their strength in earnings and stock performance. These well-established powerhouses have led the S&P 500 on its bull market journey, helping the benchmark to climb 78% over the past three calendar years. But this year has been a bit rocky for technology companies, as investors worried about a variety of challenges — from rising inflation to the risk of a potential slowdown in AI spending.
As a result, four of the “Magnificent Seven” companies are heading for gains this year, and the other three are on track to post declines. Apple (NASDAQ:AAPL) is the best performer by far, advancing 29%, while Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) is the worst-performing AI stock, declining more than 8%. (Though Tesla, down 15%, is also present in AI, it’s primarily an electric vehicle player.)
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Which stock — Apple or Alphabet — makes a better buy for 2027? Let’s find out.
Image source: Getty Images.
The case for Apple
Apple doesn’t need much of an introduction. The company has become a household name thanks to the popularity of its iPhone, the world’s top-selling smartphone, as well as other leading products such as the Mac and iPad. Apple’s solid moat, or competitive advantage, is its brand. Customers like the products so much that they keep coming back, even when the company raises prices as it did recently.
In fact, Apple just reported September quarter records in total revenue, iPhone revenue, and earnings per share. And Apple is now launching new products, including its first foldable smartphone and a touchscreen Mac, items that could generate revenue gains during the holiday season and beyond.
Apple didn’t soar as much as other tech giants in the earliest stages of the AI boom, as it took a slower approach to the technology. But it recently launched a new Siri AI assistant, and this, along with other AI features across its devices, makes it a solid AI player today.
Though Apple stock has outperformed other “Magnificent Seven” stocks, these new products, along with excitement about new chief executive officer John Ternus’ product expertise, could lead to further gains.
The case for Alphabet
Alphabet may not be a household name, but its biggest business is: I’m talking about Google Search. Many of us use the platform on a daily basis, and this helps the company generate revenue — as advertisers promote across the Google platform to reach consumers.
