The 2 Stunning Stocks with the Greatest Growth Potential, Based on Wall Street
The so-called Magnificent Seven refers to a group of technology companies distinguished by their leadership in the market and outstanding long-term returns. This collection consists of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: Meta), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA). Despite some underperformance this year among certain stocks, analysts generally hold a positive outlook, often suggesting that current prices could rise significantly. Of particular note, Microsoft and Nvidia are considered the most undervalued within this group. Should investors heed TheStreet’s suggestion to invest in both stocks?
Remember Nvidia in 2009? A similar signal is emerging now. In 2009, an indicator signaling confidence appeared for Nvidia, which was then a relatively unknown chipmaker. Now, a company significantly smaller than Nvidia is showing the same signal.
1. Microsoft
According to Yahoo! Finance, Microsoft’s average price target for the next 12 months is $559.93, while it currently trades around $385. That suggests a potential rise of about 45%. Even the lowest target, set at $400, is higher than its current trading price. While Wall Street appears optimistic, some investors remain doubtful. One concern is that artificial intelligence may render many of its products obsolete. However, the data we’ve seen so far doesn’t seem to support that idea.
Microsoft is actively incorporating AI into its services, potentially strengthening its market position. Unsurprisingly, it’s already leveraging its AI initiatives. Recently, its AI business reported a robust annual revenue run rate exceeding $37 billion, which reflects a remarkable growth of 123% compared to the previous year.
While this revenue is still a modest fraction of Microsoft’s total income, the swift growth in the AI sector might help the company sustain a strong trajectory moving forward.
Moreover, Microsoft’s Azure cloud division is thriving, showing an impressive 40% revenue increase year over year in its latest quarter. At the end of the period, cloud balances reached $627 billion, rising 99% from the previous year. The business remains stable, and thanks to Microsoft’s extensive corporate relationships, innovative strengths, and a substantial free cash flow of around $73 billion in the last year, it seems well-positioned to benefit from AI and cloud advancements while enhancing its offerings for customers.
It’s a tricky question whether Microsoft can actually meet Wall Street’s average target of $559.93 in a year. Still, the long-term views on the company appear stable.
2. Nvidia
Few firms are reaping the benefits of the AI boom like Nvidia. Still, some investors worry that the company’s impressive growth might be nearing an end. However, Wall Street seems to disagree. The current price target for Nvidia stands at $301.62, indicating nearly 43% upside from current levels. Skeptics might point out that increased competition in the GPU market could challenge Nvidia, especially as companies seek to create custom AI chips to reduce reliance on its products.
That said, there are solid reasons to stay positive about Nvidia’s trajectory. Industry leaders will likely continue benefitting from the rising spending on AI infrastructure, and there are clear signals from major spenders that this trend is likely to continue. For instance, Alphabet is planning an $80 billion capital raise to support AI investments, with a significant increase in capital spending projected by 2027.
Additionally, many firms might continue purchasing Nvidia GPUs, even as they explore custom AI chip options. Major players like Alphabet, Amazon, and Tesla are rumored to be considering similar tactics. Finally, Nvidia is capitalizing on new growth prospects. As agent-based AI systems gain traction, the demand for CPUs is also expected to rise, prompting Nvidia to introduce Vera CPUs.
The company forecasts its CPU revenue could reach $20 billion with a potential market size of $200 billion by year-end. Nvidia is in a strong position to seize this opportunity while maintaining its dominance in the GPU sector, thanks to the CUDA ecosystem, which involves lower switching costs. This suggests that even if Nvidia doesn’t achieve Wall Street’s price targets this year, it still has a reasonable chance of outpacing the market.
Should you buy Microsoft stock now?
Before making any decisions about purchasing Microsoft stock, it’s worth taking a moment to think through a few points:
According to Motley Fool stock advisors, they have pinpointed stocks that they believe are worth considering now… and surprisingly, Microsoft hasn’t made the cut. Their list includes 10 stocks positioned for good long-term growth and impressive potential returns over several years.
Based on past performance—like the 10-year growth achieved by Nvidia, for instance—people often trust such recommendations. The team touts how their Outperform the S&P 500 by 4x stats bolster their credibility. You wouldn’t want to miss their latest suggestions.
*Stock Advisor will return on July 11, 2026.
Prosper Junior Bakiny holds positions in Alphabet, Amazon, Meta Platforms, and Nvidia. The Motley Fool has investments in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
