Step Aside Magnificent 7! These Fortunate 3 Stocks are The New Market Leaders

The Magnificent Seven group of tech stocks, as a whole, may still be fantastic long-term bets. That said, we’ve witnessed a performance discrepancy between the members. And it’s only grown more striking in recent months, with the likes of Nvidia (NASDAQ:NVDA | NVDA Price Prediction) continuing to blast off while iPhone maker and perceived AI laggard Apple (NASDAQ:AAPL) has mostly sat out the surge in the S&P 500.

Time will tell if Apple and some of the other market-trailing tech titans within the seven have what it takes to pick up the slack. In any case, it’s probably time for a new acronym, especially as the bigger laggards in the cohort risk trailing the broad stock market’s returns in the second half.

In this piece, we’ll check out three proven leaders outside of the Mag Seven that I think are “new market leaders” for growth investors to keep tabs on as they continue down the high road. So, step aside, Mag Seven, there’s a new cohort in town with impressive momentum and drivers in place to continue to shine for years to come.

Palantir

No shocker here. Palantir (NASDAQ:PLTR) is a massive market gainer that’s pretty much on the watchlists of most brave momentum investors at this juncture. Shares have rocketed over 830% in the last two years, and the multi-year rally is showing no signs of slowing down. The seemingly expensive hyper-growth AI software stock has gotten pricier as investors eagerly anticipate more growth and better margins as the AI wave continues working its way through the American economy.

Despite doubling year-to-date (102% gain), many analysts seem reluctant to downgrade the stock. In fact, some of the bears, like Mizuho’s Gregg Moskowitz, turned neutral after the latest leg higher. As we head into the next quarter (due in early August), expectations are going to be high.

That’s to be expected for a stock going for over 122 times price-to-sales (P/S). That said, the company still has a very good shot of posting higher-than-expected sales growth once again, as adoption rockets higher. Personally, I think Palantir is likely to impress again. Palantir’s AI Platform (AIP) is a market disruptor. And it may very well be raising the bar or “setting a standard” that’ll be tough for rivals to match.

Netflix

Perhaps it’s time for the return of FANG, with Netflix (NASDAQ:NFLX) stock blasting off close to 40% year to date and around 188% in the past two years. Undoubtedly, the video-streaming titan has found a way to recapture the love of Wall Street with a content pipeline that’s kept it head and shoulders above rivals. The stock is priced for growth, with its 52.6 times trailing price-to-earnings (P/E) multiple, and some may wonder how the firm can power even more growth. After all, Netflix is already the streaming king.

Some may look to video-game streaming as a place where the streaming juggernaut can pick up the pace. Others may view live entertainment (think boxing, wrestling, and all the sort) as a market that’s ripe for disruption. I think gaming and live streaming are two key pillars for Netflix’s next era of growth. But perhaps the most significant driving force of Netflix’s future growth, I think, could be the rise of generative AI to cut costs in content production (think visual effects). 

All considered, I view Netflix as a winner worth paying a premium price tag for, given management’s knack for executing on technological shifts.

Uber

Despite soaring 45% year to date and 93% in two years, Uber (NYSE:UBER) stock is still looking like a value stock, with shares trading at 15.9 times trailing P/E. Indeed, Uber’s perhaps one of the best capital-light growth businesses out there as we roll into the world of robotaxis. As a “hub” for the slew of robotaxis poised to come online over the next couple of years, it looks like Uber may very well be one of the bigger winners from the rise of driverless ride-hailing.

Of course, adoption could be slower in the earlier stages, so don’t look for its traditional ride-hailing business to tread water anytime soon. Arguably, Uber is the best way for users to gradually shift gears to driverless as the technology advances and the safety track record becomes unignorable.

For now, Uber stock is a stellar tech titan that’s worth sticking with for the long haul, given all that it stands to gain from autonomous robotaxis relative to the little it’ll have to risk as it opts to collaborate with self-driving innovators rather than fly solo as some of its rivals may be inclined to do.