In the third quarter, S&P 500 companies reported earnings growth for the first time in a full year. Wall Street strategists expect that momentum to accelerate in the fourth quarter, and the prospect of another round of strong financial results is just one of the factors pushing the S&P 500 toward a record high, which would usher in a new bull market.

So what? The S&P 500 has often produced triple-digit returns during past bull markets, so many stocks would likely skyrocket during the next one. Investors looking for ways to capitalize on that upswing should consider the so-called Magnificent Seven stocks, a group of seven megacap tech stocks that have historically created tremendous wealth for shareholders.

The components of the Magnificent Seven are listed alphabetically below. Beside each is the median 12-month price target among Wall Street analysts, and the implied upside from the current price.

• Alphabet: $154 per share (16% upside)

• Amazon: (NASDAQ: AMZN): $175 per share (21% upside)

• Apple: $200 per share (3% upside)

• Meta Platforms: $382 per share (17% upside)

• Microsoft: $414 per share (12% upside)

• Nvidia: (NASDAQ: NVDA): $650 per share (39% upside)

• Tesla: $256 per share (7% upside)

Wall Street is forecasting upside for all the Magnificent Seven stocks, but none more so than Nvidia and Amazon. In other words, analysts see those stocks as the best buys of the bunch right now. Here's what investors should know.

Nvidia: 39% implied upside

Nvidia reported stunning financial results in the third quarter. Total revenue soared 206% year over year to $18.1 billion on record data center sales supercharged by interest in artificial intelligence (AI). Meanwhile, non-GAAP net income jumped sixfold to $10 billion as high-margin software and services accounted for more of total revenue.

Yet, Nvidia has hardly tapped its $1 trillion addressable market, and the investment thesis remains quite compelling: Nvidia graphics processing units (GPUs) are the gold standard in accelerated computing, a discipline that uses specialized hardware to speed up complex data center workloads. In fact, the company holds a 90% market share in workstation graphics processors, and an 80% to 95% market share in machine learning chips, according to analysts.

That last point is particularly salient. It means Nvidia dominates the AI hardware market, and that alone puts the company in a winning position. But Nvidia is truly formidable because it has a complementary ecosystem of AI software and services. DGX Cloud brings those product together, providing businesses with on-demand access to the supercomputing infrastructure, software, and pre-trained models needed to build and deploy AI applications.

In short, Nvidia has the best AI hardware on the market, and DGX Cloud makes its products more widely accessible than ever before. To quote Argus analyst Jim Kelleher, "Nvidia stands out, in our view, not only because it participates in so many parts of the dynamic AI economy, but because it has synthesized its offerings into a first-of-its-kind AI-as-a-service delivered through the cloud."

With that in mind, the AI market is projected to expand at 37% annually through 2030, and Nvidia should be a major (if not the biggest) beneficiary. Indeed, Morningstar analysts expect the company to grow revenue at 22% annually over the next decade. That forecast makes its current valuation of 25.8 times sales look relatively reasonable.

There is no guarantee that Nvidia shareholders will see 39% gains over the next year. But patient investors who can withstand volatility should feel comfortable buying a few shares today, provided they plan to hold the stock for at least five years.

Amazon: 21% implied upside

Amazon reported solid third-quarter financial results. Revenue increased 13% to $143 billion on particularly strong momentum in retail and advertising, and generally accepted accounting principles (GAAP) net income tripled to reach $9.9 billion as the company continued to make progress on expense management.

Amazon rewarded shareholders with year-to-date returns of 74%, but the company has three tailwinds at its back that leave plenty of upside for investors.

First, Amazon is synonymous with e-commerce, as evidenced by its 39% market share in online retail sales across Western Europe and North America. That scale creates a powerful network effect, and Amazon reinforced that virtuous cycle with adjacent logistics services that simplify fulfillment for merchants.

Second, Amazon rolled its success in retail into a strong presence in the digital advertising market. Indeed, the company accounts for 75% of U.S. retail media spend, which is 10 times the market share held by its closest competitor, and it ranks as the third-largest ad tech company in the world. That success arises from its ability to engage consumers and source shopper data from its marketplace, so Amazon should continue to thrive in digital advertising for as long as it remains a leader in e-commerce.

Third, Amazon Web Services (AWS) is the leader in cloud infrastructure and platform services, holding nearly as much market share as Microsoft Azure and Alphabet's Google Cloud Platform combined. Of particular note, AWS has the broadest and deepest set of AI services in the cloud, and consultancy Gartner recently recognized the company as a leader in cloud AI developer services.

Here's how that shakes out: Online retail sales are forecasted to grow at 8% annually through 2030, while the digital advertising and cloud computing markets are projected to grow at 10% annually and 17% annually, respectively, through 2032. That gives Amazon a good shot at low-double-digit revenue growth over the next decade, with a possible upside if AI products like Bedrock really take off.

In any case, that forecast makes Amazon's current valuation of 2.7 times sales look cheap. There is no guarantee shareholders will see 21% gains in the next year, but patient investors willing to hold this Magnificent Seven stock for the next five years can confidently buy a small position today.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.

A Bull Market Is Coming: The 2 Best "Magnificent Seven" Stocks to Buy Now, According to Wall Street was originally published by The Motley Fool