The Cheapest "Magnificent Seven" Stock Is a Screaming Buy Right Now

Core Viewpoint - Meta Platforms is currently trading at a discount compared to the S&P 500, making it an attractive option for investors looking for value in the tech sector [1][7]. Valuation - Meta Platforms has the lowest forward price-to-earnings ratio among the "Magnificent Seven" tech stocks, with a ratio of 21.1, compared to the S&P 500's ratio of 21.9 [3][7]. - The "Magnificent Seven" includes Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, and Tesla, all of which are among the largest companies globally [5]. Financial Performance - In Q4 2025, Meta generated $59.9 billion in revenue, a 24% increase year-over-year, with $58.1 billion coming from advertising, which produced an operating income of $30.8 billion [8]. - The Reality Labs division, which focuses on AI and hardware, reported a loss of $6 billion [8]. Investment in AI - Meta is significantly investing in AI, planning to spend between $115 billion and $135 billion on capital expenditures in 2026, primarily for AI initiatives [10]. - Despite the heavy spending on AI, the company is expected to achieve a higher operating income in 2026 compared to 2025, indicating potential growth [10]. Market Concerns - The market is apprehensive about Meta's AI spending, recalling past investments in the metaverse that did not yield expected results [11]. - Until Meta's AI projects demonstrate profitability, the stock may not return to its previous higher valuation levels [12].