Nvidia and Alphabet Lead Jefferies’ Top Picks Among ‘Magnificent Seven’ Stocks

NEW YORK, NY – Analysts at Jefferies have ranked Nvidia and Alphabet as their top picks among the “Magnificent Seven” stocks, a group of mega-cap tech companies driving market growth. The rankings, released on January 26, 2025, highlight Nvidia’s strong growth trajectory and Alphabet’s attractive valuation as key factors in their selections.

The “Magnificent Seven”—comprising Nvidia, Alphabet, Meta Platforms, Apple, Amazon, Tesla, and Microsoft—were evaluated based on quantitative measures such as growth, valuation, earnings revisions, and stock price momentum. Nvidia claimed the top spot due to its triple-digit revenue growth, upward guidance revisions, and robust analyst sentiment. Alphabet, with a forward price-to-earnings (P/E) ratio of 19.4, stood out as the most undervalued among the group.

Nvidia’s growth is fueled by its dominance in the GPU market, driven by the demand for AI infrastructure. The company’s CUDA software platform has solidified its position, capturing nearly 90% of the GPU market share. Elon Musk‘s xAI, for instance, utilized 20,000 GPUs for its Grok 2 model and plans to expand to a 1 million GPU cluster. Major investments by Microsoft and a consortium including Oracle and OpenAI further underscore the growing demand for Nvidia’s products.

Alphabet, meanwhile, reported a 15% revenue increase last quarter, with Google Cloud leading the charge at 35% growth. The company’s custom AI chips, developed in collaboration with Broadcom, are expected to enhance efficiency and reduce costs. Alphabet’s Gemini AI model and investments in quantum computing and Waymo‘s robotaxi services add long-term growth potential.

Jefferies’ rankings reflect the ongoing influence of these tech giants on the market. Nvidia’s stock, despite a 3.12% drop on January 24, 2025, remains a favorite among analysts, with a projected 24% upside potential. Alphabet, with a 9% upside potential, continues to attract investors seeking a balance of growth and value.