CK Capital
Defense/Space/Tech/Photonics Investor, Co-Owner of CV Research
The Magnificent Seven's growth, fortress balance sheets and central role in the AI buildout now come at multiples that finally make sense. They have barely bent when high-beta names lose 10% in a session; that resilience makes their valuations down here one of the better opportunities in this market. x.comÂ
NVIDIA, Palantir, Netflix, Oracle, Broadcom and Marvell are down 15-50% from their highs in a broad macro-driven selloff, not because their businesses broke. A hawkish Fed, capex fears and profit-taking are hitting everything at once, while fundamentals stay intact: NVIDIA posted record earnings, Palantir grew revenue 85%, Broadcom has a $30 billion-plus AI backlog and Marvell's revenue rose 196%. Such drawdowns are the price of admission for the best companies, not a reason to panic. x.comÂ
Nvidia's robotics and autonomous-vehicle opportunities are not yet baked into its valuation. The stock looks super cheap here and ranks first among the Magnificent Seven for investment attractiveness. x.com x.comÂ
Record-high positioning in hyperscalers and the Magnificent Seven could bring short-term weakness if the market trades against crowded holdings. The medium-term hyperscaler thesis still looks attractive, but the near-term positioning risk tempers it. x.comÂ
Microsoft's position is the most crowded among the Magnificent Seven, and fund flows are against it as funds sell those stocks to reserve cash for Anthropic's IPO. It faded despite an excellent earnings report. x.comÂ
Diversified cash flows in the billions make the AI-buildout basket more appealing than standalone model companies. Many members look reasonably priced and have longer records of delivering returns; Anthropic and OpenAI look much more like gambles at current valuations, though either could appeal at the right price. A possible equal-weight portfolio to revisit in five years includes Amazon, Alphabet, Microsoft, Meta, Oracle and SpaceX. x.com x.comÂ
Meta's core advertising business is significantly outgrowing its biggest competitors even before factoring in the newer businesses it is building. Q3 ad revenue rose 26% year over year, versus 10.6% at Alphabet and 10.9% at Amazon. Back at 19x forward earnings, Meta is the most undervalued Magnificent Seven stock. x.com x.comÂ
The Magnificent Seven's capex-heavy effort has eviscerated their balance sheets, leaving them exposed if a new technology or competitive threat emerges. That one-two hit is the real risk. x.comÂ
Quality and price favor these eight stocks. Amazon improves as its multiple falls; Uber generates serious cash flow; Netflix is more profitable at a lower multiple; ServiceNow grew amid multiple compression. SoFi's appeal hinges on earnings near management's long-term expectations. McDonald's ranks among the world's highest-quality businesses at one of its more reasonable valuations in years. AI disruption weighs on Adobe's valuation; Brookfield compounds assets at a comfortable long-term price. … Show more
Meta's valuation is compelling again because its operating-cash-flow multiple has fallen while revenue growth accelerated over the past year. It trades at 12x operating cash flow, close to 10x 2027 operating cash flow. Its unique position should make it one of the AI era's biggest winners, with Muse becoming its best asset in the long run. The equity raise's timing was unwelcome, but that is now behind it. x.comÂ
Alphabet's AI capex payback is being repriced, making its post-earnings decline more than a one-day mood swing. Guidance and cloud and AI margin commentary are the near-term tests. If growth continues but the multiple compresses, the risk is duration in mega-cap AI, not a collapse in technology growth. x.comÂ
The Magnificent Seven's bull run is only starting, because investor sentiment is unusually bearish even as the group closes at all-time highs. AAII bearish sentiment is at its 2026 high, a level last seen in April, the same squeeze setup that preceded the prior run. For Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla, this is the time to increase market exposure, not cut it. x.com x.comÂ
