Live Market News

1 “Magnificent Seven” Stock to Buy Hand Over Fist, and 1 to Avoid Like the


The S&P 500 continues to rocket higher in the first three months of 2024, fueled in part by the continued outperformance of the “Magnificent Seven.”

The seven monster stocks accounted for practically all of the S&P 500’s positive performance in the first half of 2023 and have continued to move higher as a group since then. Not every member of the group has beat the market in 2024, but those that have — Nvidia (NASDAQ: NVDA) and Meta Platforms — have significantly outperformed. Apple and Tesla are the only members that have meaningfully lagged the broader index.

While the performance of the Magnificent Seven since the start of 2023 has been spectacular, every good investor knows past performance is not indicative of future results. Investors should be determining whether today’s stock price justifies the potential future returns from the business. That’s where one of the Magnificent Seven looks particularly appealing, and another member seems overpriced.

The Magnificent Seven stock to buy hand over fist right now

Within this elite stock group, the most attractively priced for long-term investors is Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Alphabet is the company behind Google, which took a 92% share of the global online search market last month. That kind of reach is enviable for just about any ad-supported internet service, but Google can turn the dial a little more with its ancillary services. It counts nine separate products with over 1 billion users. That gives it a ton of data on its user base, which it can use to tailor its ad products and boost its prices relative to other companies.

Among those nine products with over 1 billion users is its Android operating system. The mobile OS holds a dominant global market share while still supporting nearly half of all smartphones in the U.S., where Apple’s iPhone is exceptionally popular. Owning the mobile platform for the majority of smartphones in use around the world cements Google’s position in search on mobile, despite regulatory challenges against its arrangement with Apple.

Google’s strong position in search resulted in 11% ad revenue growth in 2023. But Alphabet has several other growth drivers. Its public cloud computing service, Google Cloud, is growing quickly, up 26% last year. What’s more, Alphabet’s Other Bets segment includes several promising companies, including Waymo, its autonomous vehicle company. If any of these moonshots pay off, it could result in a multibillion-dollar opportunity for Alphabet and its investors.

Alphabet is well-positioned for consistent revenue and profit growth for years to come. Meanwhile, the stock trades for a forward P/E ratio of 22.4. That’s a slight premium to the S&P 500, but still inexpensive relative to its other high-flying peers in the Magnificent Seven.

With consistent revenue growth and margin expansion, plus the potential for a moonshot to payoff, Alphabet looks like the best stock to buy among the tech giants.

The Magnificent Seven…

Latest Market News
1 of 98



Read More: 1 “Magnificent Seven” Stock to Buy Hand Over Fist, and 1 to Avoid Like the

Leave a comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.