Nasdaq Correction: Hold These 3 Mag-7 Stocks Instead of Letting Go

In recent trading sessions, Wall Street witnessed a bloodbath, with the “Magnificent Seven” stocks dragging the Nasdaq lower. Yet, it’s still wise to have faith in three of them. Let’s explore why – Nasdaq Sell-Off ExplainedOfficially, the Nasdaq entered correction territory on Monday after tanking over 10% from its December peak. The tech-laden index also witnessed a choppy trading session on Tuesday, which ended in the red. Concerns of an imminent recession, ongoing tariff war with Europe, Mexico, and Canada, and the possibility of a government shutdown dragged Nasdaq lower, mostly led by the so-called “Magnificent Seven” stocks. Elevated stock valuations to historical averages also raised apprehensions among investors. Why It’s Wise to Hold Onto Alphabet, Amazon, & NVIDIA Investors shouldn’t get perturbed about the recent Nasdaq sell-off led by the “Magnificent Seven.” Instead, they should consider holding onto Alphabet Inc. GOOGL, Amazon.com, Inc. AMZN and NVIDIA Corporation NVDA for potential gains soon. Let’s see why – Alphabet – Solid Google Cloud & Services SegmentAlphabet is one of the major players in the cloud computing field. Its Google Cloud segment witnessed a jump in revenues and operating income in the fourth quarter, marking a shift toward profitability and potential future expansion. The Google Cloud division benefits from customers’ artificial intelligence (AI) model initiatives. Alphabet, in reality, has developed a custom AI chip. Alphabet aims to capitalize on the AI growth opportunities and intends to spend $75 billion this year to build data centers, up from $52.5 billion last year.The Google Services segment also saw a double-digit increase in revenues in the fourth quarter. This division is expected to grow further as the YouTube streaming platform becomes the most-watched video platform worldwide, while Google Search remains the leading digital advertising platform globally in terms of revenues. As a result, the company’s expected earnings growth rate for the current year is 10.7%.Amazon – AWS is a Profitable UnitLike Alphabet, Amazon’s cloud computing business is generating substantial profits for the company. Amazon Web Services (AWS) soared 19% last quarter and is now the fastest-growing segment. Amazon’s Bedrock services are helping customers to choose their own AI models while SageMaker services train these models.Amazon, meanwhile, has spent over $100 billion on AI infrastructure and created its own customer AI chip to lower costs, working alongside graphic processing units (GPUs). Anyhow, Amazon’s ad businesses have higher margins, and its e-commerce business is humming. Consequently, the company’s current-year earnings growth rate is expected to be 14.3%.NVIDIA – GPU Dominance & High Demand for Blackwell Chips NVIDIA’s CUDA software platform is in more demand among developers than Advanced Micro Devices, Inc.’s AMD ROCm software platform.  At the same time, NVIDIA continues to be a market leader in the GPU space, giving the company a competitive edge. NVIDIA’s new Blackwell chips, known for their efficiency and fast AI interface, experienced high demand last quarter and are expected to experience strong demand in the future. Its older Hopper chips are in demand, confirmed CEO Jensen Huang. DeepSeek’s cost-friendly large language model threat, though exaggerated, won’t significantly affect NVIDIA in the long term. Instead, NVIDIA is equipped to develop cost-effective products and support AI growth. So, the company’s estimated earnings growth rate for the current year is 46.8%.While NVIDIA has a Zacks Rank #2 (Buy), Alphabet and Amazon have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks