This “Magnificent Seven” Stock Looks Like a Buy

Nicknamed the “Magnificent Seven” for their significant wealth creation for shareholders over the past decade and the market’s generally upbeat view for their future, Nvidia, Apple, Microsoft, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Meta Platforms, Amazon, and Tesla are all the rage on Wall Street these days. But with such strong gains from these companies in the rearview mirror, some investors may wonder if some of these stocks have become overvalued. So, it’s worth taking some time to consider which ones might have the most potential over the next decade.

While there will likely be more than one major winner in the coming years from this powerhouse group, one stands out as an attractive investment even today: Alphabet. Not only is the Google parent company growing its top line at a robust rate, but its stock trades at a reasonable valuation relative to its underlying financials. Further, its business benefits from a massive war chest of cash.

Let’s take a closer look at why Alphabet might be the top Magnificent Seven stock to buy today.

Accelerating growth

The first reason it’s a good time to invest in Alphabet is its accelerating top-line growth. The company’s fourth-quarter revenue rose 13% year over year, up from 11% growth last quarter.

Importantly, Alphabet’s revenue drivers were broad-based in Q4. Consider its year-over-year top-line momentum in the following key areas, representing 99% of the tech company’s total revenue.

• Advertising revenue rose 11%.

• Subscriptions, platforms, and devices revenue jumped 23%.

• Cloud computing revenue soared 26%.

While this strong top-line momentum doesn’t guarantee more of the same going forward, it’s comforting to know the company’s growth is accelerating and that it’s coming from more than one area of Alphabet’s business. This likely bodes well for the future.

Tons of cash

Then, of course, there’s Alphabet’s cash hoard. The company ended the year with $111 billion in cash and marketable securities, even after repurchasing $62…