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Time for investors to have a wider stock screener.

The so-called “Magnificent Seven” inside the S&P 500 have crowded out headlines and investor thought schools for the past year amid explosive hype around AI and profit growth. But with new narratives forming in the market — such as higher bond yields and inflated tech expectations — it may be time to sniff around the S&P’s 493 other stocks.

Those 493 stocks could post a very solid 11% earnings growth this year (faster than the 8% growth in 2024) and valuations may not yet reflect that, Gargi Chaudhuri, BlackRock’s chief investment strategist for the Americas, told Yahoo Finance Executive Editor Brian Sozzi on the Opening Bid podcast (video above; listen below).

Mag 7 names are expected to grow earnings by 18% in 2025 — a slowdown from its 25% pace in 2024 and a change many upbeat investors may not be anticipating.

Chaudhuri said there are good investing opportunities this year in financials.

“Broadly, the theme that we’re talking about in our year-ahead outlook is one of quality. It is the intersection we call of quality and growth, with an eye on valuations because obviously valuations are very important to investors,” Chaudhuri explained.

Chaudhuri may be ahead of the curve on her call as earnings season unfolds.

FactSet estimates that seven sectors from inside the S&P 500 should report fourth quarter earnings growth and six should have growth in the double digits. The financials sector is slated to chime in with the highest profit increase in the quarter at 39.5%.

“If you look at earnings growth expectations, not just for Q4, but in Q1 for financials is where we’re expecting to see some of the strongest earnings growth come through after tech and comp services,” notes Chaudhuri.

FactSet says that double-digit profit growth should also hit information technology, consumer discretionary, healthcare, utilities, and communications services names.

In addition to seeking quality and growth, “we’re talking about this concept of growth at a reasonable price,” said Chaudhuri. “We look at strong, healthy balance sheets, low leverage, and companies that are really able to have repetitive earnings growth.”

In some respects, buying the S&P 500’s 493 other stocks at reasonable valuations may be a sort of defensive trade in the current environment.

The latest jobs report sent stocks on a downward spiral. Headlines abounded detailing how the Dow Jones Industrial Average lost nearly 700 points as wary investors reacted to potentially fewer Fed rate cuts.