Wall Street Experts Highlight Dividend Stocks That Deliver Steady Income

In recent years, many investors relied on a straightforward approach to beat the market: pile into the largest U.S. technology stocks. For a long stretch, this strategy delivered impressive returns. But last year, the trend faltered. For the first time since 2022 when the Federal Reserve began hiking interest rates most of the Magnificent 7 tech giants lagged behind the S&P 500.

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While the Magnificent 7 Index gained 25% in 2025 versus the S&P 500’s 16%, those numbers were largely driven by exceptional performances from Alphabet Inc. and Nvidia Corp.

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Many Wall Street analysts expect this dynamic to persist into 2026 as profit growth moderates and questions emerge about the returns from heavy artificial intelligence investments. Early results appear to support this view: the Magnificent 7 index has climbed just 0.5% year-to-date, while the S&P 500 is up 1.8%. In this environment, carefully selecting stocks within the group has become essential.

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“This isn’t a one-size-fits-all market,” said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions, which manages $1.4 trillion in assets. “Buying the entire group could see the underperformers offsetting the winners.”

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Over the past three years, the tech giants have led the bull market, with Nvidia, Alphabet, Microsoft Corp., and Apple alone contributing more than a third of the S&P 500’s gains since October 2022. Yet enthusiasm for these companies is cooling as investors increasingly explore opportunities elsewhere within the broader S&P 500.

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With earnings growth slowing, investors are no longer satisfied with promises of AI-driven gains—they want tangible results. Profits for the Magnificent 7 are projected to rise roughly 18% in 2026, the slowest pace since 2022 and only slightly ahead of the 13% growth expected from the remaining 493 S&P 500 companies, according to Intelligence data.

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“We’re seeing earnings growth spread across a broader range of companies, and that trend is likely to continue,” said David Lefkowitz, head of U.S. equities at UBS Global Wealth Management. “Tech is no longer the only game in town.”

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One potential silver lining for the Magnificent 7 is their relatively modest valuations. The index trades at 29 times projected profits over the next year, well below the 40-plus multiples seen earlier this decade. By comparison, the S&P 500 trades at 22 times forward earnings, and the Nasdaq 100 is at 25 times.

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Here’s a closer look at what analysts are projecting for each company in 2026:

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Nvidia
The leading AI chipmaker faces pressure from rising competition and concerns over whether its largest customers will sustain spending. While Nvidia shares have surged 1,165% since the end of 2022, they are down 11% from the October 29 peak. Competitor Advanced Micro Devices Inc. has secured data center deals with OpenAI and Oracle Corp., and Nvidia’s clients like Alphabet are increasingly deploying their own custom processors. Still, demand continues to outpace supply, keeping sales growth robust.

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Wall Street remains optimistic: 76 of 82 analysts covering Nvidia maintain buy ratings, with average price targets suggesting a potential 39% upside over the next year the highest among the Magnificent 7, according to Bloomberg data.

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Microsoft
Microsoft underperformed the S&P 500 for the second consecutive year in 2025. One of the largest AI investors, the company is expected to spend nearly $100 billion in capital expenditures in its current fiscal year ending in June, with projections rising to $116 billion next year. This expansion is fueling revenue growth in its cloud-computing division, though adoption of AI-powered services across its software suite has been slower than anticipated.

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Investors are now looking for clearer returns on these investments. “People want better cash flow visibility and a clearer picture of profitability from AI,” said Brian Mulberry, client portfolio manager at Zacks Investment Management.

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Apple
Apple has taken a more cautious approach to AI than its peers, and its stock was punished last year, falling nearly 20% by early August. However, it later gained momentum as an “anti-AI” play, jumping 34% by year-end as investors rewarded its lower exposure to AI spending risks. Strong iPhone sales also reassured shareholders of the company’s ongoing demand strength.

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For Apple, sustaining growth will be crucial in 2026. Revenue is projected to rise 9% in fiscal 2026, the fastest pace since 2021, while shares trade at 31 times expected earnings the second-highest valuation among the group after Tesla.

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Alphabet
A year ago, investors worried that Google’s parent might fall behind OpenAI in the AI race. Today, Alphabet is widely viewed as a leader, thanks to its Gemini AI model and its tensor processing unit chips, which could drive future revenue and chip market share. The stock rose more than 65% in 2025, the best among the Magnificent 7. Yet with a market cap approaching $4 trillion and shares trading at roughly 28 times earnings above its five-year average the upside appears modest, with analysts projecting just a 3.9% gain.

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Amazon
Amazon was the weakest performer among the Magnificent 7 in 2025, but the stock has started 2026 strongly. Much of the optimism centers on Amazon Web Services, which recently posted its fastest growth in years. Efficiency initiatives, including warehouse automation and robotics, are expected to pay off, potentially turning Amazon from laggard to leader this year.

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Meta Platforms
Meta illustrates investor skepticism over large AI expenditures. CEO Mark Zuckerberg has invested heavily in AI, including a $14 billion acquisition of Scale AI. However, rising capital spending projections for 2025 and 2026 led to a 17% drop in the stock after it had gained 35% earlier in the year. Demonstrating profit returns from AI will be critical for Meta in 2026.

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Tesla
Tesla underperformed early in 2025 before rallying more than 40% in the latter half, as CEO Elon Musk shifted focus from slowing EV sales to autonomous driving and robotics. The stock now trades at nearly 200 times projected profits. After two stagnant revenue years, Tesla’s sales are expected to grow 12% in 2026 and 18% in 2027, following a 3% contraction in 2025. Still, analysts are cautious, projecting a 9.1% decline over the next 12 months.

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