The “Magnificent Seven” group of stocks hasn’t fared the best in 2026. These are the year-to-date stock performances for each company:
NVIDIA(NASDAQ:NVDA):-5%
Apple(NASDAQ:AAPL):-6%
alphabet(NASDAQ: GOOG)(NASDAQ:GOOGLE):-3%
Microsoft(NASDAQ:MSFT):-23%
Amazon(NASDAQ: AMZN):-8%
meta platform(NASDAQ: META):-13%
Tesla(NASDAQ:TSLA):-23%
Not one of those stocks has been in the black for the year, making it a fairly low bar to clear when the only hope is to break even. However, a more interesting comparison is to look at companies operating in the same industry as these seven. In particular, any artificial intelligence (AI) stocks that are outperforming this group are on my watch, as the market has viewed companies in this sector negatively.
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The two that have outperformed the Magnificent Seven and given solid returns so far in 2026 are nebius (NASDAQ: NBIS) And corewave(NASDAQ:CRWV). Both of these are up more than 30% and 15% respectively for the year and are competing directly against the three companies of the Magnificent Seven. But can they sustain it? let’s take a look.
Image Source: Getty Images.
Nebius and Corewave are both Involved in cloud computing. Both of these are considered neocloud companies, which focus their attention on graphics processing units (GPUs) and other computing units instead of general cloud computing, specializing their product for AI cloud computing, which can be used for data storage, hosting websites, and other tasks that do not require excessive computing power.
This puts them in direct competition with Alphabet, Microsoft, and Amazon, as each is a cloud computing provider that offers customers both general cloud computing and AI-focused options.
However, in a twist, Microsoft is also a major customer of both Nebius and CoreWeave. This may sound strange, but it also makes sense. To make CoreWeave and Nebius attractive to customers, they will have to offer the most cutting-edge computing units available. Nebius also has a deal with Nvidia that gives it access to the latest hardware before anyone else.
It also cuts both ways, as these computing units often become obsolete within a year or two after installation. Microsoft doesn’t want to risk this depreciation, so it’s happy to sign deals with Nebius and CoreWave to rent out their computing capacity for its customers’ workloads.
Meta Platform is another major customer of Nebius and CoreWave from the Magnificent Seven and has signed large deals with each of them to secure AI computing capacity, presumably for the same reason as Microsoft. With high demand for cutting-edge AI computing power, both are set to flourish over the next few years, but are these smart investments?
Wall Street analysts have high expectations for each of these stocks over the next few years. This year, they expect Nebius to grow its revenue by an average of 523%, with next year’s growth rate lower but still a phenomenal 194% increase. Expectations for CoreWeave aren’t as high, but the average analyst still expects growth of 142% this year and 86% next year.
Those growth rates reflect growing demand for AI computing power, and as long as AI spending maintains its trajectory, corewave And Nebius will experience incredible growth. However, they are financing their growth at the expense of profits.
Both CoreWeave and Nebius are spending every dollar they can get to build out their AI infrastructure masterplans. It’s not cheap, and it’s important to gain market share early so they can later move to a more standard cloud-computing model, where growth is steady and profits are higher. Both companies need to continue the AI race for a few more years to reach a point where they are viable companies, so investors should keep an eye on this risk.
For now, I expect these stocks to continue rising. If the market turns on them and demands profits now, they could fall and perform less than a stellar seven. The level of long-term risk is much higher than investing in Magnificent Seven shares, but the return potential is similar. If you can balance these two aspects, Nebius and CoreWave could be great stock options.
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Keithan Drury There are positions at Alphabet, Amazon, Meta Platform, Microsoft, Nebius Group, Nvidia and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platform, Microsoft, Nvidia, and Tesla, and owns short shares of Apple. The Motley Fool has one Disclosure Policy.
