Omor Ibne Ehsan

Thu, Jun 26, 2025, 4:30 AM3 min read

The Magnificent Seven dominated the market in 2023 and 2024. But so far this year, these stocks haven’t lived up to the hype. For instance, the Roundhill Magnificent Seven ETF (MAGS) is essentially flat year-to-date. In comparison, the S&P 500 Index ($SPX) is up nearly 4%. That’s surprising for many, since these stocks have spearheaded the bulk of the stock market’s gains over the past three years.

But they’re now being replaced by a new group of popular stocks. Wall Street is starting to ditch the Magnificent Seven in favor of more up-and-coming stocks. Let’s take a look at three such names to see whether or not it’s a good idea for you to do the same.

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Palantir’s (PLTR) price action over the past year should remind you of Nvidia’s (NVDA) price action from mid-2022 to mid-2024. PLTR stock has blown past expectations and has bested even some of its most bullish analysts.

The outperformance has been so great that the stock trades at 1,166 times trailing earnings and over 115 times sales. Most investors would tell you that’s unsustainable in the long run, and they’re probably right. However, the same investors have gotten it wrong about just how far this mania can go.

Price targets go up to $155 here, implying nearly 9% upside. I would only buy PLTR stock if you are okay taking on high double-digit downside risk. Palantir is an extraordinary company, but whether or not it can sustain a dotcom-esque premium once the pendulum swings the other way is yet to be seen.

UnitedHealth (UNH) is about as far away as you can get from PLTR stock at the moment. The company missed its Q1 earnings, followed by multiple negative catalysts that have caused the stock price to nearly halve in 2025.

However, UNH now sits at prices that are too good to ignore. The troubles UnitedHealth faces now aren’t likely to linger for years, so a rapid recovery could be in play if its management can start beating earnings estimates as usual and regulators continue being lenient. In my opinion, this is a solid buy. You’re getting America’s largest healthcare insurance company at a once-in-a-lifetime dip. UNH stock could decline even more, but the risk-reward ratio is skewed in your favor.