Only One of the Two Underperforming Magnificent Seven Stocks Set for a Comeback This Year
Amid a robust year for many technology giants, two notable members of the “Magnificent Seven” are struggling. Amazon and Apple both saw reduced trading values up to the middle of 2025, raising concerns about their performance compared to their counterparts. With the rest of the Magnificent Seven experiencing an impressive 18.7% surge, the slight declines of Amazon and Apple are noteworthy.
A Closer Look at Amazon
Amazon, a leader in e-commerce, is not performing at its usual high standards. While it recently completed its Prime Big Day Deals, the company’s growth rate has stagnated, averaging between 9% and 12% over the past three years. This subdued performance is particularly concerning given Amazon’s history of more significant growth since its inception.
- Total net sales increased 11% in the first half of the year.
- The latest quarter showed a 13% year-over-year net sales rise, the most substantial since late 2023.
- International sales saw a significant boost of 16%.
- Amazon Web Services (AWS) achieved an 18% growth rate, representing a critical component of Amazon’s business model.
Despite these figures, analysts predict only modest growth ahead. The forecast includes a 10% increase in net sales and a 15% rise in net income for the upcoming year. Investors remain hopeful that Amazon will outperform expectations in its next quarterly report.
Challenges Facing Apple
Apple began 2025 as the most valuable company but has since fallen behind Nvidia and Microsoft. The company’s revenue growth is concerning, particularly in recent years. Apple’s traditional strategy of boosting sales through iPhone upgrades every few years seems to be faltering.
Recent Financial Performance
Here’s a summary of Apple’s net sales growth over the past several fiscal years:
| Year | Net Sales Growth (%) |
|---|---|
| 2012 | 45 |
| 2013 | 9 |
| 2025 (First 3 Quarters) | 6 |
Analysts anticipate only 7% growth for the fourth quarter results on October 30, extending a concerning period of minimal growth. Investors are beginning to question Apple’s strategy to shift focus to services, as this area has also fallen short of expectations.
Apple’s future depends on a promising product launch, as its recent Vision Pro headset and AI integration have yet to achieve notable market traction. With its stock trading at over 30 times forward earnings, many view Apple as a less attractive investment compared to its Magnificent Seven peers.
Conclusion
Amazon appears to be the more favorable investment among the underperforming Magnificent Seven. With its legacy of growth and recent positive trends, it may be poised for a comeback in 2025. Apple, however, must quickly adapt to regain its momentum in the tech market.
