Daniel
Self-Directed Investor, YouTube Investing Creator
Nvidia is the cheapest Magnificent Seven stock on a five-year PEG ratio at 0.72, below the 1.0 fair-value mark, while Microsoft at 1.33, Amazon at 1.81, Alphabet at 2.34, Apple at 2.43 and Tesla at 5.87 are expensive for their growth. That valuation dispersion is massive, and the market is mispricing some of them. x.com x.com
The biggest companies are not done growing, as Meta's and Tesla's own compensation targets signal. Meta announced a stock option plan tied to a $9 trillion market cap by 2031, and Tesla approved an Elon Musk pay package worth up to $1 trillion if it reaches $8.5 trillion, each about 500% above today. Those targets sound insane but are being set because they are realistic. $10 trillion companies are coming, and NVIDIA will be the first. x.com x.com
Nvidia, Broadcom and Meta look attractively valued on PEG ratios, while Apple looks expensive. A PEG below 1 signals mispriced growth and above 2 means things are getting expensive; Amazon, Microsoft and Alphabet rate as reasonable. x.com
Low PEG ratios and continuing AI demand make leading AI stocks attractive after rolling corrections. Nvidia is at 0.39x PEG, Amazon 0.64x, Broadcom 0.66x, Micron 0.73x, Oracle 0.59x and TSMC 0.41x. This usually signals at least a local bottom, possibly a major one; midterm-year seasonality helps into year-end. Nvidia, Broadcom and Amazon remain favorites; Micron and TSMC look buyable on dips. Low PEG can mislead if growth slows or estimates are wrong. x.com
Amazon looks cheap against its expected long-term earnings growth if that growth proves accurate. Its five-year consensus growth is the fastest in the Magnificent 7 after Nvidia, while its 0.90 forward P/E-to-growth ratio is the lowest excluding Nvidia. x.com x.com
Nvidia's valuation gives too little credit to its expected long-term earnings growth. Its forward P/E-to-growth ratio is 0.28, the lowest since late 2023; the bullish read depends on those growth expectations proving accurate. x.com x.com
Nvidia's 0.39 PEG suggests its valuation is low relative to growth. Its 26.56x P/E and 17.55x forward P/E are below their respective ten-year medians of 50.36x and 26.5x. x.com
Apple has the most predictable cash flows, including future cash flows, and that dependability appears to be what investors reward. Its P/E is about 40 versus 27 for Nvidia, 22 for Meta and 16 for Alphabet; Meta's free cash flow has turned negative. Leveraged build-out companies have been hit hardest while Apple has outperformed, but Apple investors could be wrong and the point at which its premium becomes too high remains open. x.com x.com x.com
Nvidia's rising revenue alongside a much lower P/E is getting hard to ignore. Its chart shows quarterly revenue above $80 billion in Q2 2026 while the P/E is around 30x, down from much higher multiples in prior years. x.com
Amazon, Microsoft, Meta and NVIDIA look cheap for their high expected 2026-2028 growth, per a Bank of America screen. They trade at 21.4x, 18.7x, 16.3x and 15.7x 2027 earnings respectively, versus about 21x forward earnings for the S&P 500. x.com
A ten-year low in forward P/E makes hyperscaler valuations look more than reasonable. Goldman Sachs' chart tracks Amazon, Alphabet, Meta, Microsoft and Oracle as a basket. x.com
Six of the seven biggest tech stocks look super cheap on forward P/E after steep multiple compression, while Tesla remains expensive. Amazon trades near 25.6 times versus a peak of 80-100, Nvidia near 20.3 versus 62-65, Microsoft near 18.9 versus 35-38, Meta near 17.6 versus 30-plus, and Alphabet near 23.9 versus 30-35. Apple, at 29.3 times, is only slightly below its peak, while Tesla at about 179 times is still expensive even after compression. x.com
