Key insights
- The article highlights Meta Platforms (META) as a "dirt-cheap" Magnificent Seven stock, suggesting it's undervalued compared to its peers and the S&P 500. Despite strong revenue growth driven by AI in its advertising business, the market's skepticism regarding its AI infrastructure investments may be suppressing its valuation. The author believes this presents a buying opportunity, as Meta is one of the fastest-growing stocks in the group and is trading at a significant discount.
The "Magnificent Seven" is a group of tech stocks that make up a huge chunk of the market. All seven are in the top 10 of the world's largest companies, highlighting their importance. The group is made up of:
If you had bought all of these stocks a decade ago and held onto them, you'd be a thrilled investor. However, you can't go back and capture those returns, so all that's left is to look toward the future. There's one of these stocks in particular that looks like a screaming deal, and I think that investors should take advantage of the sale price while it's still active.
From many viewpoints, the cheapest stock on this list is Meta Platforms. This is odd, considering it's also one of the fastest-growing.
Since the start of 2025, Meta has only been outgrown by Nvidia, which isn't a bad place to be. This comes from Meta's dominance in the social media realm. Its core properties of Facebook, Instagram, WhatsApp, and Threads generate nearly all of Meta's revenue from advertising. Meta has incorporated artificial intelligence (AI) tools into its advertising products, which has translated into strong revenue growth from better conversions.
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While Meta has invested a ton in its AI infrastructure, we haven't seen anything too groundbreaking come from these investments, which could be the reason why the market is skeptical about giving Meta a regular price tag. However, if it does, Meta stock will be primed to rise, as it trades for a much lower price than its peers.
There's a wide range of valuations here, but Meta is clearly the cheapest by some margin. I think that shows just how big a bargain Meta is right now, as it's rare to get the second-fastest growing stock of the group at the cheapest price tag.
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From a different valuation metric, the forward price-to-earnings ratio, Meta is still cheap. (Note: Tesla was removed for skewing the chart because it trades for nearly 200 times forward earnings.)
Compared to the S&P 500, which trades for 22.2 times forward earnings, Meta's stock is not only cheap compared to its peers but also the broader market.
Meta's base advertising business is strong and improving every quarter, and there is monster upside if just one of its AI bets works out. I think that makes for a compelling risk/reward profile for Meta's stock, making it a top stock to buy now in the Magnificent Seven.