There’s a term known as the “Magnificent Seven,” which refers to seven top-performing tech companies that really dominated the scene. But, well, 2025 didn’t turn out to be so great for a lot of them.
In fact, five of these companies ended up underperforming. Just to give you some context, the S&P 500 saw a return of 16.4%, but two notable exceptions were Nvidia and Alphabet. Nvidia’s stock surged by 38.9%, while Alphabet jumped an impressive 65.4%.
You might be wondering, with those significant gains, is it wise to invest in Nvidia now? For those with a long-term vision, it seems like a solid choice.
Nvidia, as of early January 2025, holds the title of the world’s most valuable publicly traded company, boasting a market cap exceeding $4.5 trillion. Much of its remarkable growth can be traced back to the current trend surrounding artificial intelligence (AI).
The company’s graphics processing units (GPUs) are pivotal for training and running AI models, creating a sort of essential partnership in AI development. Nvidia has pretty much cornered the market on high-end AI hardware, leading to remarkable spikes in both its stock price and revenue.
I mean, if Nvidia keeps pushing its AI infrastructure, it’s likely to remain a major winner in the arena. Though there’s always the chance competitors might catch up, particularly with companies like Amazon and Alphabet developing their own chips. But, let’s face it, switching providers isn’t particularly easy for customers.
Nvidia trades at 38 times next year’s expected earnings. That’s pretty high, right? Still, if you’re in it for the long haul, increasing your stake in Nvidia makes a lot of sense, albeit with some expected market ups and downs.
There were worries that AI tools like ChatGPT might overshadow Alphabet by making people less reliant on traditional Google searches. So far, though, that hasn’t been the case. Instead of diminishing its search edge, Alphabet has smartly woven AI into its search functionality, which, in most instances, seems to have improved user experience. True, people’s search preferences are changing, but so far, that’s encouraging.
As for Alphabet’s Google Ads, it’s still a crucial revenue driver, making up over 72% of total revenue in Q3. Plus, there’s a promising outlook for their cloud business, which has been fast-growing lately.
Looking forward, Google Cloud will continue to work in tandem with services like Amazon Web Services and Microsoft. While Azure might gain ground temporarily, Alphabet has laid a solid foundation for meeting the increasing demand for cloud services. With in-house data centers and its own chip development, Alphabet is on track for a comprehensive AI stack.
In short, Alphabet seems like a solid stock choice for this year and beyond.
However, if you’re considering Nvidia, keep in mind some analysis from Motley Fool Stock Advisor. Their team has pinpointed what they think are the best investments right now, and surprisingly, Nvidia isn’t on the list. They see other stocks with promising potential for healthy returns in the coming years.
Let’s take something like Netflix for example—it was recommended back in December 2004. Investing $1,000 then would have turned into about $461,527! And it’s a similar story with Nvidia if you look back to April 2005, where a $1,000 investment would now be worth around $1,155,666.
Just to highlight, the average return for Stock Advisor is a staggering 950%, significantly outpacing the S&P 500’s return of 197%. So, if you’re intrigued about the latest top 10 stocks, definitely check it out.
*Stock Advisor will return on January 28, 2026.
