If I Could Buy Only 1 "Magnificent Seven" Stock in 2026, This Would Be It | The Motley Fool

The premise of only picking a single stock from a small group of options obviously doesn't apply in the real world. You can buy any stock (or as many stocks as) you want to at any given time. Nevertheless, this sort of thought exercise has value. Not only does it require you to weigh a company's own pros against its own cons, but it also forces you to compare one potential investment to another. This can end up being surprisingly enlightening. With that as the backdrop, I recently made such a deep comparison of all the Magnificent Seven stocks to one another. One name emerged as the top prospect for 2026. That's Amazon ( AMZN +0.16%). Here's why. Image source: Getty Images. 4 reasons to buy Amazon stock sooner rather than later Don't misunderstand. Other Mag-7 stocks like Nvidia , Microsoft , and Alphabet are still solid investments. On a risk-versus-reward basis, though, Amazon is the top prospect for 2026 for four largely related reasons. 1. Underperformance in 2025 means a discounted price Just because a stock's been lagging the market doesn't mean it's become worth buying. On the other hand, the time to step into a good stock is when it's trading at a discount. To this end, as of the latest look, Amazon shares are up just a little less than 6% since the beginning of 2025, versus nearly an 18% gain for the S&P 500 and more than a 22% gain from the Nasdaq Composite . That's not an insignificant disparity. Indeed, it's enough of a difference to catch bargain hunters' attention. 2. This weakness doesn't reflect the past year's actual fiscal performance Granted, a poor stock performance alone isn't enough of a reason to buy a stock; some stocks often deserve to underperform. This arguably isn't one of those times, however. Amazon's revenue is on pace to improve by 12% year over year in 2025, pumping up profits from last year's $5.53 per share to $7.06. That's growth of nearly 28%. The company largely met or topped its sales and earnings estimates in 2025 as well. Its cloud computing arm's reported revenue and/or guidance disappointed a couple of times. However, some of these expectations were unfairly high, with much of any struggle on this front stemming from a tariff-driven headwind that hasn't been as persistent as first feared. 3. An impending swell of earnings growth This is still just the beginning, though. Revenue growth is expected to accelerate all the way through the end of 2029, in step with profit growth. Data source: Morningstar. Chart by author. Yes, cloud computing (which already accounts for roughly two-thirds of companywide operating profits ) plays a big role in this future growth ... but not as overwhelmingly much as you might think. As it turns out, Amazon's usually low-margin e-commerce operation is widening its profit margins quite a bit as Amazon.com's advertising business explodes. Ads may be a more lucrative means of monetizing its online shopping website than selling...

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