If you think the stock market could fall in 2026, it might seem counterintuitive to load up on growth stocks. Investors tend to gravitate toward income and value stocks during times of uncertainty because these companies are priced higher for their existing earnings than their potential earnings.
But if you’re a long-term investor looking to hold stocks for three years, five years, or even decades, then a selloff in the market can present impeccable buying opportunities despite the pain of volatility. The key is to find companies with the fundamentals to withstand downturns. And a good place to start is with industry leaders like the “Magnificent Seven,” which are the seven largest technology-focused sevens. S&P 500 companies by market capitalization.
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Meta platforms(NASDAQ: META) and Microsoft(NASDAQ: MSFT) are two Magnificent Seven names that could retreat amid a broader market selloff, especially as it relates to artificial intelligence (AI). But looking long-term, these companies stand out as solid buys even in today’s premium-priced market.
Here’s why you can rest easy on these stocks regardless of what the market brings in 2026 — along with key takeaways from their recent earnings reports.
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Meta Platforms delivered explosive results for the fourth quarter and full year 2025 on January 28.
As expected, costs and expenses rose 40%, outpacing revenue growth of 24%, as Meta ramps up capital spending (capex) on its AI investments — building its own data centers, improving its search algorithms to generate advertising and content for users, expanding its large language model to power the Meta AI assistant and more.
Meta continues to lose billions from its Reality Labs division, which is responsible for research and development and augmented and virtual reality products such as Ray-Ban Meta glasses and Meta Quest headphones. Reality Labs aims to connect the physical and digital worlds by expanding the metaverse, but the strategy has been far from profitable, with Reality Labs only generating $2.2 billion in revenue compared to $19.19 billion in operating losses in 2025.
Wall Street is tolerating Reality Labs’ abysmal performance as Meta’s family of apps (Instagram, Facebook, Messenger and WhatsApp) posted record operating income of $102.5 billion in 2025. To put that number in context, consider that the family of apps’ operating income grew $15.4 billion in 2025, or 6% in 2025 –6%. A single year of growth in the app family was almost big enough to offset a full year of losses from Reality Labs.
Meta’s fourth-quarter earnings release gave investors a sigh of relief, stating that Reality Labs’ 2026 operating losses will be similar to 2025 levels. This would end their annual streak of higher year-over-year losses and build on news last December that Meta was scaling back its metaverse spending. Instead, Meta is focusing its efforts on Meta Superintelligence Labs, which relies on its AI models to create AI systems and products for consumers.
If Meta Platforms is going to bet on moonshots, investors probably prefer Meta Superintelligence Labs to Reality Labs. And with the family of apps continuing to gush free cash flow, the stock remains a phenomenal buy at just 22.5 times forward earnings.
In the early stages of the AI boom in 2023 and 2024, investors were quick to encourage increased spending on it. But as the themes mature, the euphoria fades and investors want to see tangible results from higher spending.
This dynamic was displayed on January 28, when Meta platforms rose as much as 11.2% in after-hours trading, even as it spends a lot of capital on AI. While Microsoft has fallen as much as 10% since reporting earnings, largely due to concerns over AI spending.
The technology already benefits the Meta Family of Apps with content creation tools and by aligning user interests with relevant advertisers. And its family of apps will benefit from Meta’s bold bets on personal superintelligence.
Instead, Microsoft is betting big on artificial intelligence, building out its data center infrastructure Nvidia and Advanced microdevices chips as well as its in-house designed AI chip, the Maia 200 accelerator.
Capex for the second quarter of fiscal 2026 was $37.5 billion — a 65.9% increase from the same quarter a year ago. By comparison, Microsoft’s revenue was up 17% and operating income was up 21%. Those are great results, but whenever a company’s expenses far outpace sales and earnings, investors naturally become skeptical.
The company is such a big cash cow that it can afford to take risks. Even with higher spending, Microsoft still came out of the last quarter with $89.55 billion in cash, cash equivalents and short-term investments, compared with $35.4 billion in long-term debt.
Its share buybacks and dividends are up 32% from the second quarter of fiscal 2025. So Microsoft is nowhere near the point where it should stop buying back or slow its dividend growth. In fact, the company pays by far the most dividends of any S&P 500 company.
All in all, Microsoft’s sales are a buying opportunity, as the company can afford some delayed gratification when it comes to AI spending. However, its backlog is heavily dependent on OpenAI, so investors should continue to monitor management’s ability to convert orders into real results, especially if OpenAI goes public later this year.
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Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft and Nvidia. The Motley Fool has a disclosure policy.
2 ‘Magnificent Seven’ Unstoppable Growth Stocks to Buy Even If There’s a Stock Market Sell-Off in 2026 was originally published by The Motley Fool
