The reveal of US President Trump’s Liberation Day tariff has certainly wreaked havoc on Wall Street this week. Although the market had not been particularly strong before the announcement, things took a turn for the worse on Thursday. Amid the drop, which two Magnificent Seven stocks are top buy options as the market drops?
The fall in prices is concerning for many traders; however, it is also a clear opportunity. With the ability to buy the dip, there are some key contenders that could propel a portfolio through the recent decline. With retail traders spending $4.7 billion in stocks, the most in a decade, the market is clearly seeing the bright side of the recent collapse.
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Magnificent Seven Plummets Amid Trump Tariff: But Which Ones Should You Buy The Dip On?
The stock market tumbled mightily following the news of a new 10% baseline tariff on all US trading partners. Although there had been rumblings that the economic policy was coming, its arrival sparked concerns over a trade war and a US recession. However, downturns like this always provide retail traders with a great opportunity.
With the Magnificent Seven stocks shedding $1 trillion in market cap this week, there are two stocks that emerge as potential buying opportunities amid the recent decline. The question is, which stock presents the most upside with so much uncertainty on the horizon?
Specifically, the two most promising Magnificnet Seven stocks are Microsoft (MSFT) and Amazon (AMZN). Down 19% and 25% respectively, they are key opportunities and may not be this cheap for a long time. Both stocks have diversified in recent years and remain leaders in the emerging AI and cloud computing sector that has seen increasing demand throughout 2024.
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Microsoft has a clear winner in its Azure cloud platform. Its revenue related to AI services increased 157% year over year in Q2. Moreover, it allows companies the freedom to create their own AI software, something that is showing increasing attractiveness. With a revenue growth of 31% year over year, MSFT is a clear Magnificent Seven opportunity as it is at its cheapest valuation in more than two years.
Amazon has a similar attractiveness. The company Amazon Web Services (AWS) is its immensely popular cloud platform. Its Trainium and Inferentia data center chip is said to reduce costs by up to 40%.
Moreover, its Nova AI model is 75% cheaper than its competitors. That should only help strengthen its $637 billion total revenue in 2024. Indeed, AWS accounted for a remarkable $107 billion of that revenue, bringing in 58% of the total figure.