The Best Magnificent Seven Stock to Buy on the Dip.jpeg
Heavy technology Nasdak The index currently finds itself in the correction area. The stock market correction occurs when the market decreases by 10 % or more than its highest levels ever.
Should investors buy a decrease? There is an opportunity for the last decline to turn into something worse, such as the long bear market. However, most of the 10 % corrections solve themselves at a relative speed, making it great times to capture high -quality companies for a long time.
This means for those who look forward to adding it to their long -term portfolios, and high -quality stocks may be in the “Seven Magnificent” group, which has declined with the market, is great Pickup today. Among these seven stars, one is a very safe name that is the best in the group at this right moment.
Photo source: Getty Images.
Over the past ten years, the Nasdaq Stock Exchange has corrected six times, which is good for one time every 1.67 years. So, the good news is that the correction is a regular part, and it may be healthy, from the market.
On the other hand, corrections sometimes turn into a full bear market, which is a correction of more than 20 % and usually lasts much longer than just corrections.
It remains to see whether the current decline is a worse thing. Investors may not know until April 2, when mutual definitions in the Trump administration are supposed to enter Mexico and Canada in their full impact. Even if they do that, it remains to see if they will cause the full bear market.
Given the very uncertain impact of definitions, investors who are looking to add to their stock portfolios at this moment should be committed to high -quality “relatively” safe arrows that, however, with experience, but can also overcome a complete stagnation if it is related to passing. For this reason the next seven wonderful arrows look very attractive now.
Microsoft(Nasdaq: msft) It is the second largest company in the world today and an essential indicator in many technology portfolios, but this does not mean that the company cannot outperform the advancement.
Microsoft is one of a few companies that compete for the superiority of artificial intelligence (AI). Given the massive investment required to compete in the race for artificial general intelligence (AGI), it is not impossible to think that the largest companies can become more powerful after 10 years from now. After all, people were wondering whether the law of the Big Numbers would attend the Mag-7 shares for a period of time. However, these incredibly innovative companies have challenged the skeptics and have been able to devise their way to the growth of huge profit over the past decade.
Moreover, if the economy falls from the bed, Microsoft has $ 71.6 billion in cash on its public budget for only $ 45 billion of debt. Moreover, in the first half of its financial year (ended in December), Microsoft achieved $ 26 billion of free cash flow, supported by a group of high socialist companies in the margin, most of which are stagnant -resistant socialist companies.
In fact, Microsoft is only one of two companies with AAA credit rating – a rating that goes beyond the American government’s classification!
Microsoft has surpassed the market by a big difference since Satia Nadella took over as CEO in 2014, but its performance over the past two years has already left some of its peers. In fact, the arrow is actually under 8.2 % during the past year-the only negative performance of all Mag-7 names.
MSFT 1 year -old total (daily) revenue by Ycharts.
But this weak performance does not appear due to any Microsoft’s mistake. In the last quarter, Microsoft increased revenue by 12 %, and operating profits grew by 17 % with the expansion of margins.
Therefore, the last weak performance may be only due to irregular structures of gains and monotheism periods with any stock. Microsoft shares are now trading at 31.5 times of late profits, towards the minimum limb over the past five years:
MSFT PE ratio by Ycharts. PE = price ratio to profits.
With the evaluation reset, the arrow can soon enter a new period of superior performance.
Some wondered about the financial return of the last artificial intelligence. In that memo, Microsoft’s revenues and its profits appear to have a batch this year due to an increase in the recent prices – in reality. In January, Microsoft announced a significant increase in prices by 43 % for consumer subscription to Microsoft 365, which will now cost $ 9.99 per month or $ 99.99 annually, an increase of $ 6.99 and $ 69.99 annually.
This increase in prices is to pay the price of all Copilot features that Microsoft has been arrogant in its 365 program (which is previously called Office) in recent years. Although high prices may seem excessive, in reality it is the first price increase on the 365 -year -old consumer product.
Now, investors must reduce their enthusiasm for this one increases slightly, as the consumer was 365 represented only about 3 % of Microsoft’s revenues. Therefore, the bump in revenues and profits may be somewhat gradual from this alone.
However, Microsoft 365 commercial products represent 31 % of total revenue. Although Microsoft has recently increased the prices of the commercial product, the last price increased was only 10 % to 20 % through the 365 commercial product range in 2022.
ChatGPT has not come out until the last month of 2022, so Microsoft has not increased the prices of 365 commercial products in the era of artificial intelligence so far. Therefore, if the smaller test for increasing prices on the consumer product 365 is going well, there may be an increase in prices for commercial subscriptions 365 on the road. Which – which It can make a big difference in Microsoft results.
Finally, starting this year, Microsoft may reduce the main concern of investors about the escalating costs of Amnesty International. To date, Microsoft has been particularly large on artificial intelligence chips for its competitors. Last year, OMdia Technology Consulting Company estimated that Microsoft bought 485,000 Nafidia(Nasdaq: nvda) Hopper graphics units in 2024 – and beyond the largest purchase of any other customer from NVIDIA.
This is more than just the buyer’s weakness in the second largest buyer, Definition platformsWhich bought 224,000 flying chips, and 2.5 times the number of graphics processing units purchased by Amazon(Nasdaq: amzn) Although Amazon has greater cloud computing works than Microsoft.
Microsoft not only bought more official processing units than anyone else, but also a huge tenant from the latest “NeoClouds” graphics units, such as Coreweave, which is about to be exposed to the public in a preliminary public offering (IPO). According to Coreweave S-1, Microsoft Microsoft accounted for Coreove $ 1.92 billion last year.
The reason for the huge Microsoft spending is that the scope of its AI (XPU) business has not expanded, while its adult clouds have invested in XPU programs for years until now. NVIDIA GPUS is sold to huge margins, as evidenced by the intense margins and operation that the company has been going through since the artificial intelligence revolution began two years ago.
Consequently, Amazon and other strong dedicated chips programs direct the largest possible number of work burdens to dedicated chips as far as possible and away from NVIDIA graphics processing units. For this reason, Nvidia GPU’s Amazon purchases were much lower than Microsoft.
But this only means that Microsoft has a much more chance to provide Amnesty International’s infrastructure when it increases its XPU business. This should happen soon. Microsoft has just presented Maia AI chips in late 2023 and not only published from the first generation Maia XPUS so far. Therefore, the company’s microsoft program in the company in the company did not have much time to press and slope to large folders enough to compete with Amazon and others so far.
However, CEO Satia Nadella said in an interview in late 2024 that Microsoft will not be “chips” by mid -year as it was last year. This may mean that Microsoft will increase the Xpu program in the next generation in the middle of 2015, allowing significant saving costs and another increase in margins.
It should unite both the last missing performance, relatively less evaluation, increase future prices, and provide potential artificial intelligence costs to enable Microsoft to prosper in 2025. While the wider total economic image is unconfirmed today, the seeded Microsoft AAA remains a higher name now for investors with a long -term investment mentality.
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He continues.
*The stock consultant dates back from March 18, 2025
John Maki, former Chole Foods Market, a affiliate company, a member of the Motley Fool Board of Directors. Randy Zuckerberg, former Director of Market Development and Speak for Facebook and Sister to Meta Platforms, Mark Zuckerberg, member of Motley Fool Board of Directors. Billy DubersStein and/or its clients have functions on Amazon, Meta and Microsoft platforms. Motley Fool has positions in Amazon, Meta Protects, Microsoft and NVIDIA recommends. Motley Fool recommends the following options: Long January $ 2026 $ 395 on Microsoft and Short January 2026 $ 405 calls on Microsoft. Motley Fool has a disclosure policy.
Nasdaq Correction: The best wonderful seven shares have been published to buy at the present time by Motley Fool