Anders Bylund, The Motley Fool

Sat, Jun 21, 2025, 4:51 AM3 min read

• Alphabet shares have dipped 2% over the past year, while most "Magnificent Seven" stocks posted double-digit percentage gains.

• Market leaders like Nvidia and Microsoft may look flashier, but Alphabet could offer better value.

• A tasty combination of affordable shares and artificial intelligence (AI) expertise sets this stock apart from the rest.

• 10 stocks we like better than Alphabet ›

The "Magnificent Seven" moniker was originally intended as a warning to long-term investors. Remember, the movie by the same name doesn't have the happiest of endings, and the tragedy made sense as a metaphor for potential market bubbles. Still, the Magnificent Seven group keeps setting the tone for the overall stock market, and most of these stocks are market darlings in 2025, with double-digit price gains over the last 52 weeks.

But Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is lagging behind with a 2% price dip over the last year, and the stock looks downright undervalued in many ways. It's the only Magnificent Seven stock I have bought this year, for one simple reason: It's the best combination of affordable shares and unbeatable artificial intelligence (AI) expertise in this elite group.

The other Magnificent Seven companies may have a leg up on Alphabet in the AI market so far. Nvidia's (NASDAQ: NVDA) profitable sales growth is unbeatable. Revenue-based market shares suggest that the cloud computing solutions from Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) are running circles around Google Cloud.

But those proven and promised results are firmly baked into the stock prices. Nvidia stock trades at 47 times earnings and 49 times free cash flows today. Microsoft and Amazon have P/E ratios in the mid-30s and cash flow multiples well above Nvidia's. At the same time, Alphabet stock looks affordable at 19 times earnings and 28 times free cash flows.

The numbers never tell the whole story, and there's more to say about Alphabet's long-term growth opportunities. From AI services to quantum computing systems, the company was built to thrive amid ever-changing markets and unexpected economy jolts. But the modest stock valuation is a great starting point for further research.

Before you buy stock in Alphabet, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.