Latest news with #MagnificentSeven
Wall Street Journal
4 hours ago
- Business
- Wall Street Journal
The Unlikely Stocks That Drove the Market to a Record High
It is easy to tell a simple story about the stock market at the moment. But it would be wrong. The simple story is Big Tech is back, baby! The Magnificent Seven went into a tailspin as tariffs, war and the spectacle of the president's coming close to firing the head of the Federal Reserve sent the world's biggest stocks plunging. But they have pulled out of their dive, and despite Friday's renewed trade tensions with Canada, both the S&P 500 and the Nasdaq made new highs on Friday. Boom!
Business Insider
7 hours ago
- Automotive
- Business Insider
It's Time to ‘Pump the Brakes,' Says Analyst on Tesla Stock (TSLA)
Tesla (TSLA) is one of the most popular stocks among both Wall Street and retail investors, and understandably so, as the stock has generated phenomenal returns over the years, yielding a total return of 1,854% over the past decade. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter It has also captured the public's imagination with its forays into exciting fields like robotics and self-driving cars, as evidenced by this week's Robotaxi launch, which caused shares to surge 8% on Monday but have since pared gains to now trade ~2% lower. Despite this rally driven by Robotaxi enthusiasm, the stock is down nearly 30% from its 52-week high, which may lead some investors to look for the opportunity to 'buy-the-dip' on this popular name. However, the stock hardly appears to be a bargain at this point in time and may decline further. TSLA's Extreme Valuation Raises Eyebrows While Tesla (TSLA) is an intriguing self-driving stock, and the limited Robotaxi launch is generating considerable investor excitement, the stock is incredibly expensive from a valuation perspective. Shares of Tesla trade at an astronomical valuation of 169x 2025 earnings estimates. It's hard to understate how frothy this valuation is, but to put it into perspective, it's over eight times as expensive as the S&P 500 (SPX), which trades for 21x forward earnings estimates (and keep in mind that this is in and of itself a historically above-average valuation for the index). You can make the case that Tesla should be worth more than the 'average' company in the S&P 500, as the company and the rest of the Magnificent Seven stocks are some of the most dominant and innovative companies in the world. But not only is Tesla more expensive than the average stock in the S&P 500, it's also considerably more expensive than all of its magnificent seven peers, as TipRanks data shows. For comparison, Microsoft (MSFT) trades at 36x 2025 earnings estimates, while Amazon (AMZN) and Nvidia (NVDA), which have long been derided by many value investors for their lofty valuations, trade at similar valuations of 34x forward estimates for 2025 and 2026, respectively. Meta Platforms (META) and Apple (AAPL) both trade for roughly 27x 2025 estimates. Alphabet (GOOGL) is currently the cheapest stock in the Magnificent Seven, trading for just 18x 2025 estimates. TSLA is Priced for More Than Perfection When a stock is trading at such elevated valuation levels, it's often said to be 'priced for perfection.' But in this case, it's difficult to argue that everything is unfolding perfectly—significant risks remain. Elon Musk is widely regarded as a visionary CEO and brilliant engineer, but his tendency to court controversy is unparalleled, and it's increasingly cutting across political lines. While alienating one side of the political spectrum might be manageable—potentially offset by support from the other—Musk has managed to provoke backlash from both the left and the right in a relatively short period of time. His public support for Donald Trump during the presidential election alienated many on the left, while his subsequent high-profile dispute with Trump has also drawn criticism from the right. Although the details have been widely reported, the broader concern is that this bipartisan controversy could ultimately affect consumer sentiment and impact sales. When you pair this with the stock's lofty valuation, the potential downside risk becomes more pronounced. If Robotaxis are Overhyped, TSLA Could be in Trouble Let's take a closer look at Tesla's Robotaxi initiative, which has been driving the stock's momentum this week following a high-profile launch event in Austin. While the event generated significant media buzz, the substance of the launch was more modest. According to Reuters, only a small number of Teslas—each with a human safety monitor in the front seat—provided rides within a tightly geofenced area of Austin. Importantly, this was a private, invite-only event aimed at investors, influencers, and brand enthusiasts, rather than a public rollout. Many attendees posted their ride experiences on social media, adding to the event's visibility. That said, the launch was limited in both scale and scope. Even within this controlled environment, there were reported issues. The Verge noted an incident in which a Model Y briefly drove the wrong way down a street, while Tesla critic Ed Niedermeyer highlighted another case where a vehicle abruptly braked in traffic in response to a stationary object outside its path. These and similar reports have already prompted regulatory attention, with the National Highway Traffic Safety Administration reaching out to Tesla shortly after the event. It's also worth noting that Tesla is not alone in the autonomous vehicle space, and some competitors appear to be significantly further along. Alphabet's (GOOGL) Waymo, for instance, is already operating at scale, providing over 250,000 rides per week across cities like Los Angeles, San Francisco, and Phoenix. Having recently surpassed the 10-million ride mark, Waymo is quietly leading in real-world deployment, despite receiving far less media attention than Tesla. In this context, while Tesla's ambitions are noteworthy, its current progress in the Robotaxi space still lags behind established players. Is Tesla a Buy, Sell, or Hold? Turning to Wall Street, TSLA carries a Hold consensus rating based on 14 Buys, 12 Holds, and nine Sell ratings assigned in the past three months. The average TSLA stock price target of $291.31 implies 10.5% downside potential over the coming year. Sky-High Valuation Leaves Little Room for Error in Tesla's Stock While shares of Tesla have regained momentum based on robotaxi excitement, it's likely a good time to pump the brakes on this enthusiasm. The limited nature of the launch, strong competition already in place (and further ahead of Tesla), and the regulatory attention the company is already facing illustrate the challenges ahead. Robotaxis aside, Musk has demonstrated a remarkable ability to make enemies on both sides of the U.S. political divide, which has already led to a consumer backlash and could further harm sales. Despite these developments, the stock remains priced for perfection, trading at a sky-high price-to-earnings multiple—approximately 8.5x higher than the S&P 500 average—and at a premium well above any of its peers in the so-called 'Magnificent Seven.' The average analyst price target implies a potential 10% downside, and the consensus Hold rating underscores the elevated risk associated with the current valuation.
Forbes
a day ago
- Business
- Forbes
Finding Quality In A Volatile Market: Globe Life Inc. (GL)
Rising stock market chart on a trading board background. The Magnificent Seven are often in the spotlight, but not because of any major shifts in their businesses. Some could call it a proverbial flip of the narrative switch to shine the lights on the usual suspects to stir up some fresh buying activity. It's a classic case of attention reallocation rather than fundamental change. Investors beware – just because the hype machine is revving doesn't mean there's substance behind the noise. In a market driven by headlines, hype, and momentum, identifying truly high-quality investment opportunities requires more than surface-level analysis. Research grounded in deep diligence, which considers financial statements, footnotes, and management commentary unveils the kinds of businesses worth owning, not just trading. My Most Attractive Stocks Model Portfolio identifies the best stocks in the market, i.e. the stocks that are not only undervalued but also possess strong fundamentals. To demonstrate how my company's superior research creates alpha, I'm are sharing a stock pick from this Model Portfolio. This pick comes with a concise summary, not a full Long Idea report. The summary gives you insight into the rigor of my firm's research and approach to picking stocks. Whether you're a subscriber or not, I think it is important, especially in today's volatile market environment, that you're able to see quality research on stocks. I'm proud to share my work, and I want to help investors when they need it most. Stock picking success, like golf, is as much about how well you hit your bad shots as how well you hit your good shots! Most Attractive Stocks Pick: Globe Life Inc. (GL) Globe Life (GL: $120/share) has grown revenue and net operating profit after tax (NOPAT) by 4% and 7% compounded annually since 2014, respectively. Globe Life's NOPAT margin increased from 14% in 2014 to 19% in the TTM, while its invested capital turns fell from 1.0 to 0.9 over the same time. Rising NOPAT margins are enough to offset falling invested capital turns and drive Globe Life's return on invested capital (ROIC) from 13% in 2014 to 16% in the TTM. Figure 1: Globe Life's Revenue and NOPAT Since 2014 GL Revenue And NOPAT: 2014-TTM GL Is Undervalued At its current price of $120/share, GL has a price-to-economic book value (PEBV) ratio of 0.6. This ratio means the market expects Globe Life's NOPAT to permanently decline by 40% from TTM levels. This expectation seems overly pessimistic for a company that has grown NOPAT by 7% compounded annually over both the last ten and five years. Even if Globe Life's NOPAT margin falls to 12% (which would be the lowest NOPAT margin since 1999) and the company grows revenue by just 3% (below ten-year CAGR of 4% and five-year CAGR of 5%) compounded annually through 2034, the stock would be worth $156/share today – a 30% upside. In this scenario, Globe Life' NOPAT would fall 2% compounded annually through 2034. Should Globe Life grow profits more in line with historical levels, the stock has even more upside. Critical Details Found in Financial Filings by My Firm's Robo-Analyst Technology Below are specifics on the adjustments I made based on Robo-Analyst findings in Globe Life's 10-K and 10-Q: Income Statement: I made over $100 million in adjustments, with a net effect of removing over $15 million in non-operating expense. Balance Sheet: I made nearly $4 billion in adjustments to calculate invested capital with a net increase of under $1 billion. One of the most notable adjustments was for other comprehensive income. Valuation: I made just under $200 million in adjustments, all of which decreased shareholder value. The most notable adjustment was for outstanding employee stock options.
CNBC
a day ago
- Business
- CNBC
Buy this megacap tech stock that's set to rally more than 20% due to AI, says Citizens
The ramp up in artificial intelligence may send shares of Alphabet higher in the coming months, according to Citizens. The investment firm upgraded the "Magnificent Seven" name to market outperform from market perform and set its price target at $220, implying nearly 27% upside from Thursday's close. "We believe AI is a net tailwind, with ChatGPT's impact too small today to move enough queries away from Google to materially impact results, while AI is expanding the search opportunity by answering a broader array of queries and extending monetization as AI better infers user intent," analyst Andrew Boone wrote in a note published Thursday. While the megacap tech stock has fallen more than 8% this year, it has rebounded about 6% over the past three months. It has also jumped more than 4% in the past week amid investor confidence in AI, which propelled other stocks linked to the industry like Nvidia higher this week as well. GOOGL 3M mountain GOOGL, 3-month Boone thinks that Google's AI Overviews – a feature that offers a summary of answers to search questions at the top of Search – will reach 4 billion monthly users by the third quarter of this year, seeing that the feature will cover about two-thirds of queries by the next quarter. That would be up from 1.5 billion monthly users in the first quarter of this year. "With AI Overviews becoming generally available in the U.S. as of May and leading to 10% query growth in testing, we believe AI is a net tailwind," he continued. "Net/net, AI is growing the use of search at a faster rate than ChatGPT is taking share." The analyst also projects that Search revenue growth will accelerate in the second as a result of AI supporting query growth and the development of Google's ad products. Wall Street is mostly bullish on Alphabet, as 43 out of 55 analysts have issued strong buy or buy ratings on the stock. Its nearly $202 consensus target also reflects more than 16% upside from here.
Yahoo
2 days ago
- Business
- Yahoo
These 3 Tech Stocks Are Unstoppable Monsters
Nvidia should remain a fixture in AI for the foreseeable future. AI is driving cloud growth for Amazon, and could eventually cut costs in its e-commerce operations. Meta Platforms continues to invest in AI using its deep pockets, funded by a lucrative ad business. 10 stocks we like better than Nvidia › In the grand scheme of things, modern technology is only now beginning to hit its stride. The internet is only a few decades old. Technological innovation has accelerated significantly since the early 2000s, with the internet playing a pivotal role in paving the way for cloud computing. Now, artificial intelligence (AI) is emerging as the next growth frontier for investors. The companies leading the way have grown to immense size and scale, garnering the nickname the "Magnificent Seven." The exciting part is that it appears there is still a massive runway ahead for future innovation and the continuation of ongoing trends. Three companies stand out to me. They have become juggernauts and could be unstoppable technology leaders well into the future. Here are the three monster stocks you should consider investing in for the long term. Nvidia (NASDAQ: NVDA) has had a huge impact since the push to build artificial intelligence infrastructure went into overdrive in late 2022. Companies continue to race to build massive data centers with thousands of the company's GPU accelerator chips. It started with Nvidia's Hopper microarchitecture and has since evolved into Blackwell. According to IoT Analytics Research, Nvidia owns an estimated 92% of the AI data center GPU market. While data center spending continues to rip and roar in 2025, it's wise to think about AI's next innings. There is a good chance that computing resources will expand beyond data centers to localized areas where they can power new technologies, such as humanoid robotics or autonomous vehicles. Nvidia already has its eyes on these opportunities, fleshing out an ecosystem of hardware and developer tools that will entice companies to build on its platform. Many of the companies building all these data centers continue to struggle with capacity constraints, so it doesn't seem that Nvidia's business will slow anytime soon. The stock's price-to-earnings (P/E) ratio is 47 today. That may seem like a lot, but considering analysts estimate Nvidia will grow earnings by nearly 29% annualized over the long term, the reigning AI leader should continue to deliver for investors over the coming years. Amazon (NASDAQ: AMZN) isn't necessarily known as an AI company, but it's poised to be arguably the biggest beneficiary of AI innovation. That's for two reasons. First, Amazon operates the world's leading cloud platform, Amazon Web Services (AWS). AI technology primarily runs on the cloud, so AI applications are directly driving growth in Amazon's cloud business. AWS also happens to be the company's most profitable business unit. The less obvious opportunity is how AI may shape Amazon's core e-commerce business over the next decade and beyond. Humanoid robotics and smart drones could be game changers for Amazon's fulfillment network, enabling automated order picking at distribution centers and potentially even autonomous deliveries. The company is already working to train robots to deliver packages. Amazon's e-commerce sales are already massive, reaching a whopping $387 billion in North America alone last year. Each basis point of margin improvement would be tremendous for the company's bottom line. Today, the stock's P/E ratio is 35, a reasonable price tag for a business that Wall Street expects will grow earnings by over 15% annually over the long term. Meta Platforms (NASDAQ: META) continues to win in social media. Over 3.4 billion people log into its social media apps each day, including Facebook, Instagram, WhatsApp, and Threads. Meta Platforms generated $41.3 billion in advertising revenue last quarter, and remarkably, Meta isn't fully monetizing its apps. The company recently announced it will begin placing ads in status updates and channel pages on WhatsApp, its popular messenger app with over 3 billion monthly users. It's likely to continue growing Meta's core advertising business, which generates the immense cash profits CEO Mark Zuckerberg is using to continue building out AI hardware and software. The company recently announced a massive $14.3 billion investment for a 49% stake in Scale AI, a company that helps prepare data for AI model training. Additionally, Meta is unveiling new smart glasses through partnerships with Oakley and Prada, adding to the company's existing lineup alongside Ray-Ban. Meta's social media dominance makes the stock a strong buy at 27 times earnings, and an anticipated 18% annualized earnings growth rate. Investors should look for AI to play an increasingly meaningful role in Meta's success as these investments, new products, and strategic decisions begin to bear fruit. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $687,731!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $945,846!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy. These 3 Tech Stocks Are Unstoppable Monsters was originally published by The Motley Fool Effettua l'accesso per consultare il tuo portafoglio
