After Falling to Pre-ChatGPT Valuations, Magnificent Seven Stocks Are Attracting Some Attention

The once high-flying “Magnificent Seven” tech stocks—Amazon, Apple, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla—are starting to regain investor interest after a tough start to 2025. Following two years of extraordinary growth fueled by the artificial intelligence boom, these giants have cooled off significantly. But now, their stock valuations have fallen to levels not seen since before the launch of ChatGPT in late 2022, prompting a fresh look from analysts and investors.

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Amazon, for instance, is now trading at a trailing 12-month price-to-earnings (P/E) ratio of 32. That’s a major drop from the 86 P/E ratio it held on November 30, 2022, the day OpenAI released ChatGPT. The launch of the chatbot ignited a rally across the stock market, especially among tech names closely linked to AI. Nvidia, widely seen as the leading beneficiary of the AI wave, currently trades at a P/E ratio of about 36—also down significantly from the 56 range it once commanded.

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Several other mega-cap stocks have valuations that are now either back to or near their pre-ChatGPT levels. Apple is at a 29 P/E, close to the 25 range from late 2022. Alphabet, Google’s parent company, is trading at an 18 P/E, roughly in line with where it stood before the AI frenzy. Microsoft, meanwhile, sits at 29, slightly above its previous 26.

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Only Tesla and Meta Platforms are still trading well above their pre-AI valuations. Tesla’s P/E ratio has climbed to 119, far surpassing its 2022 level around 70. Meta, too, has seen its valuation increase, now trading at a 23 P/E compared to about 10 before.

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Despite the cheaper valuations, investors aren’t diving back into all seven stocks at once. While the synchronized surge among these tech behemoths once earned them the “Magnificent Seven” nickname, the recent divergence in performance has investors being more selective—especially amid new AI launches like DeepSeek and increasing macroeconomic uncertainties.

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Mark Malek, chief investment officer at Siebert Financial, noted that his firm is focused on just five of the seven stocks. “It’s more like the Mag Five for us,” he said, explaining that while all of the names except Apple and Tesla look promising, investors need to remain cautious. “They’re cheap here,” he added, hinting at potential buying opportunities as earnings season approaches.

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The reality, however, is that nearly all of these stocks are still technically in a bear market. Tesla has taken the biggest hit, shedding about 48% of its value from recent highs. Nvidia is down 28%, while Apple, Alphabet, and Amazon have each dropped over 23%. Meta Platforms has lost more than a quarter of its market capitalization. Microsoft, while also down, has fared the best, sitting around 17% below its peak and avoiding the bear market designation.

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Even so, this past week brought a wave of bargain hunting. Investors seized the opportunity amid volatile market swings. Apple snapped a three-week losing streak. Nvidia jumped more than 17% through Friday’s close. Amazon climbed over 8%, while Microsoft, Meta, and Alphabet all gained more than 7%. Tesla also recovered slightly with a 5% gain.

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Nelson Yu, head of equities at AllianceBernstein, said that now is the time for a more selective approach. “As a stock picker, I would actually go one by one,” he noted, pointing out that while opportunities exist, investors must assess each company individually rather than treating the group as a whole.

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Looking ahead, many of the long-term arguments in favor of the Magnificent Seven still hold. These companies have enormous cash reserves, strong balance sheets, consistent profitability, and powerful competitive advantages. But rising macroeconomic risks—including inflation, interest rate uncertainty, and trade policy developments—have some investors treading more carefully.

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Apple, the largest company by market weight in the S&P 500, is facing renewed concerns over potential tariff increases under former President Donald Trump’s trade policies. With China still serving as a major manufacturing base for the iPhone maker, fears are growing that Apple may have to hike product prices, potentially hurting demand. Some analysts believe that the company’s expanding operations in India could help offset these challenges.

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“We’re going to have to watch Apple very, very closely before we become constructive on that again,” Malek said. Still, Apple did get some relief when smartphones were excluded from the new tariffs, easing pressure for now.

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Nvidia, while vulnerable to broader economic shifts, continues to draw analyst support. Joseph Moore of Morgan Stanley recently reaffirmed Nvidia as a top semiconductor pick, arguing that macroeconomic effects on the company are “fairly minimal” thanks to continued strong demand for its chips.

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Malek said he remains cautious until earnings season provides more clarity. “I think there are opportunities,” he emphasized, but added that valuations must continue to be scrutinized before making any moves.

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For now, it appears the Magnificent Seven are entering a new chapter—one defined not by uniform surges, but by more measured, selective investing.

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