Not all Magnificent Seven stocks are created equal. That was confirmed when the group was producing stellar returns prior to 2025. And investors are being reminded of that point as the cohort broadly scuffles in the first quarter.
Those struggles don’t necessarily portend more of the same for the remainder of 2025. But even if a rebound is near, investors may want to consider the benefits of embracing ETFs like the Invesco Top QQQ ETF (QBIG) rather than attempting to identify the best of the Magnificent Seven.
Actively managed, QBIG attempts to generate returns on par with the Nasdaq-100 Mega Index. That gauge is the Magnificent Seven plus Broadcom (AVGO), and is a derivative of the famed Nasdaq-100 Index (NDX). That DNA is noteworthy. But more important than that is the utility offered by the ETF. Their flexibility that could be right for the current market environment.
QBIG Credentials Matter
One potential tailwind for QBIG is that the Magnificent Seven, often criticized for demanding valuations, is currently sporting its lowest premium relative to the S&P 500 in eight years, notes Goldman Sachs strategist David Kostin.
That doesn’t mean QBIG is “cheap” per se. But its components’ valuations are less demanding than they have been in some time. And that trait is clear at a time when the seven companies are still expected to produce EPS growth that outpaces that of the broader market. Amazon (AMZN), the largest consumer cyclical component in QBIG, is an example of a Magnificent Seven name that could drive the ETF’s resurgence.
The stock “is now trading for 25 times Evercore ISI internet analyst Mark Mahaney’s 2026 earnings estimate—a figure based on generally accepted accounting principles, or GAAP, that includes the stock-based compensation that many other tech companies still exclude from their preferred earnings calculations,” reported Andrew Bary for Barron’s. “And Amazon is trading at its lowest price/earnings multiple ever," he noted.
Google parent Alphabet (GOOG) could also contribute to QBIG upside. Amid regulatory concerns, the stock is down, as are its valuations. But it remains a high-quality cash-flow generator with ample levers for future growth.
“Investors also get a valuable tech conglomerate beyond search. Alphabet’s businesses include YouTube; a cloud-computing business that does $50 billion in sales annually; the Android mobile operating system; and Waymo, one of two leaders in autonomous driving along with Tesla,” according to Barron’s.
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