After a Disappointing 2025, Here's My Favorite "Magnificent Seven" Stock in 2026

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Amazon's e-commerce margins are expected to proceed expanding arsenic it introduces much automation and robotics.
Advertising is Amazon's fastest-growing concern segment, outpacing AWS.
The company's existent price-to-earnings ratio is little than fractional of its five-year average.
10 stocks we similar amended than Amazon ›

It wasn't each creaseless sailing (it seldom is), but overmuch of the U.S. banal marketplace performed good successful 2025. The S&P 500 finished the twelvemonth up much than 16%, the Nasdaq Composite finished up implicit 20%, and the Dow Jones Industrials finished up adjacent to 13%.

The "Magnificent Seven" stocks besides had a large year, arsenic the artificial quality (AI) roar continued to propulsion up the valuations of the country's large tech stocks. Unfortunately, 1 cardinal sanction underperformed importantly successful 2025 -- Amazon (NASDAQ: AMZN), which finished 2025 up astir 5%, the worst show among these 7 stocks.

Despite Amazon's underwhelming 2025, it's my favourite Magnificent Seven banal to statesman 2026, arsenic I judge the institution is owed for a resurgence.

A transportation idiosyncratic holding 2 boxes.

Amazon became a household sanction due to the fact that of its thriving e-commerce business, which brought unprecedented convenience to American shoppers. The concern has ever been a currency cow, often generating much gross successful a 4th than galore S&P 500 companies bash successful a fiscal year.

For the astir part, Amazon utilized its e-commerce concern to bring gross successful to money different ventures, but it mostly operated with razor-thin margins and often mislaid money. Now, the concern has seemingly turned the country arsenic Amazon has invested heavy successful robotics and automation.

Leaning connected robotics and automation has allowed Amazon to drastically chopped costs (and, unfortunately, quality jobs) and summation efficiency. By the extremity of this year, the institution is projected to person adjacent to 40 fulfillment centers equipped with robots, redeeming up to $4 billion, according to Morgan Stanley.

Nowadays, astir of the absorption connected Amazon goes to its unreality business, Amazon Web Services (AWS) -- and rightfully so, considering however important the conception is to the company's wide business. In the 3rd quarter, AWS lone accounted for astir 18% of Amazon's full gross ($33 billion) but much than 65% of its full operating income ($11.4 billion).

That said, 1 concern conception that has flown nether the radar for Amazon is its advertizing business. It's the company's fastest-growing segment: