Magnificent Seven stocks have been some of the most successful growth stocks and make up a large portion of the S&P 500. However, all of those same stocks have valuations above $1 trillion, which makes it harder for those same stocks to double, triple, or 10x from current levels.
That’s why some investors are seeking smaller growth stocks that are posting impressive revenue growth. These stocks have the potential to outperform the Magnificent Seven stocks in 2026 and receive more attention from investors.
Nebius (NBIS)
Nebius (NASDAQ:NBIS | NBIS Price Prediction) offers full-stack cloud infrastructure for AI giants like Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META). This service will become more valuable as tech giants invest more in the physical infrastructure that’s necessary for AI workloads. The company recently announced a 5-year deal with Meta Platforms for $3 billion, and the recurring revenue from these contracts can lead to significant stock gains.
Nebius is aiming for 2.5 gigawatts of active power by the end of 2026. The 5-year, $19.4 billion deal with Microsoft takes up 300 megawatts, so the company can support plenty of deals like its ones with Microsoft and Meta Platforms. Nebius anticipates annual recurring revenue of $7 billion to $9 billion by the end of 2026.
Nebius also owns stakes in several AI businesses, such as autonomous vehicle company Avride and edtech firm Tripleten. The company’s additional megawatts of energy will become available at the right time as it continues to ride the AI wave.
Palantir Technologies (PLTR)
Palantir (NASDAQ:PLTR) is another AI stock that has outperformed the S&P 500 this year. It has an annual recurring revenue model and continues to sign lucrative deals for its AI software. Palantir shares are up by 147% this year and have surged by more than 600% over the past five years.
The company secured 204 deals of more than $1 million in Q3, with 53 deals exceeding $10 million. A growing portion of those deals came from U.S. businesses. Palantir saw a 121% year-over-year increase in its U.S. commercial revenue. That segment contributed to 63% year-over-year revenue growth across the entire business.
Palantir is a key part of the AI backbone that lets governments and businesses create custom AI agents. The switching costs are immense for any customer who wants to abandon Palantir since it doesn’t have much competition, which makes it easier for the AI software giant to boost its annual recurring revenue each year. High revenue growth also came with net profit margins more than tripling year-over-year. The company closed out Q3 with a superb 40.3% net profit margin.
Walmart (WMT)
Walmart (NASDAQ:WMT) has AI bots in its warehouses that boost efficiency, but most of the company’s success comes from more than 10,000 retail locations. Walmart’s scale makes it easy for the company to offer low prices and quick delivery times that make it difficult for competitors to keep up.
The stock outperformed the S&P 500 and most Magnificent Seven stocks this year with a 29% gain. Its Q3 FY26 results suggest that the gains may continue in 2026. Walmart delivered 5.8% year-over-year revenue growth, with its e-commerce segment up by 27% year-over-year. Rising e-commerce sales can also boost the company’s ad revenue since customers will spend more time on Walmart’s websites.
Online ads are a key piece of Walmart’s profit margin expansion. It’s still a small part of the business, but it’s up by 53% year-over-year. Walmart’s net profit margin improved by 26.7% and reached 3.4%. One of Walmart’s weaknesses is its low margins, but online ads can become a solution over time and push the retailer to a $1 trillion valuation in 2026.
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