Wall Street's high-water price targets imply that a trio of magnificent stocks will skyrocket between 69% and 90% this year.Wall Street's benchmark index, the S&P 500, is enjoying a historic run. Since 1928, it's gained at least 16% in three consecutive years on three separate occasions. Two of those three periods have occurred since 2019 (2019-2021 and 2023-2025). While game-changing technological trends, such as the rise of artificial intelligence (AI), have played a role in catapulting the broader market ...

Core Insights - Meta Platforms has been a strong performer among the "Magnificent Seven" stocks, achieving a 539% return over the past decade, although it is the lowest performer in this group [3][2] - The company has a robust advertising business model, with nearly 98% of its projected $201 billion in net sales coming from advertising by 2025 [8] - Meta's board missed an opportunity to enhance retail investor interest by not executing a stock split, which could have made shares more accessible [5][19] Company Performance - Meta's stock has outperformed the S&P 500 over the last three years and is currently the top-performing stock among the Magnificent Seven [3] - The company closed 2025 with $81.6 billion in cash and generated $115.8 billion in net cash from operating activities, allowing for aggressive investments in technology [10] Market Position - Meta's social media platforms attract an average of 3.58 billion daily users, providing significant advertising power and a sustainable competitive advantage [6][7] - The company is heavily investing in artificial intelligence, which is expected to enhance its advertising capabilities and improve click-through rates [9] Stock Split Discussion - Meta has never completed a stock split since its IPO in 2012, which is unusual for a company with its growth trajectory [13] - The current share price of $716.50 may be restrictive for retail investors, and 29.3% of its shares are held by non-institutional investors, indicating a potential incentive for a stock split [15][16] - A stock split could help Meta attract more retail investors and support its ambitious capital expenditure plans, which are projected to be between $115 billion and $135 billion in 2026 [20]

Core Insights - The article discusses the performance and outlook of the "Magnificent Seven" companies, highlighting a strong growth stock and a pricey industry leader that investors should be cautious about in 2026 [1][3]. Group 1: Magnificent Seven Overview - The "Magnificent Seven" includes Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, and Tesla, which have significantly outperformed the S&P 500 over the past decade [2]. - Over the last 10 years, the S&P 500 has increased by 236%, while Meta Platforms has risen by 522%, and Nvidia and Tesla have seen extraordinary gains of 22,820% and 2,640%, respectively [2]. - These companies possess sustainable competitive advantages, such as Alphabet's 90% control of global internet search and Nvidia's dominance in AI-accelerated data centers [2]. Group 2: Meta Platforms as a Buy - Meta Platforms is identified as the stock to buy in 2026, with a strong user base of 3.54 billion daily users across its apps, making it a leading choice for advertisers [5][6]. - The company has a robust cash position, ending September with nearly $44.5 billion in cash and equivalents, allowing for investment in growth initiatives without immediate monetization [9]. - Meta's valuation is attractive at 22 times forward-year earnings per share, with potential sales growth of up to 20% in 2026 [10]. Group 3: Tesla as a Stock to Avoid - Tesla is highlighted as a stock to avoid in 2026, despite its significant market cap of nearly $1.5 trillion and profitability over the past five years [11][12]. - The company's vehicle operating margin has been declining, and it has had to reduce prices due to increasing competition and weaker global demand for EVs [13]. - A large portion of Tesla's profits comes from unsustainable sources, such as regulatory credits and interest income, rather than core EV sales [15]. - The company's high valuation at nearly 200 times EPS, with expected sales declines of 3% in 2025, raises concerns for investors [17].

Core Insights - The S&P 500 experienced a rally of over 16% in 2025, marking its third consecutive year of gains exceeding 15%, driven by lower interest rates, stock-split enthusiasm, and the rise of artificial intelligence (AI) [1] Group 1: AI Market Potential - Analysts at PwC estimate that advancements in AI could contribute more than $15 trillion to global GDP by 2030 [2] - The AI revolution is expected to significantly impact various sectors, with two companies positioned to capitalize on this trend [8] Group 2: Meta Platforms as a Key Investment - Meta Platforms (NASDAQ: META) is highlighted as a top stock to buy in 2026, benefiting from the AI revolution [4] - The company generates approximately 98% of its net sales from advertising across its platforms, attracting an average of 3.54 billion daily visitors [6] - Meta is deploying generative AI solutions to enhance advertising effectiveness, which may protect it from potential downturns in the AI market [7] - As of September, Meta had over $44 billion in cash and equivalents, with nearly $80 billion in net cash generated from operations in the first nine months of 2025, allowing for investment in high-growth initiatives [8][9] Group 3: Investment Risks - Despite the potential of the AI market, not all AI stocks are expected to succeed, with one highly popular stock advised to be avoided in 2026 [3]

Core Viewpoint - The article discusses the potential for two major companies, Meta Platforms and Goldman Sachs, to announce their first-ever stock splits, which could significantly impact their stock prices and investor sentiment in 2026 [2][8]. Group 1: Stock Splits Overview - A stock split allows a company to change its share count and price without affecting its market capitalization or operational performance [3]. - Forward splits are generally viewed positively by investors, while reverse splits are often associated with struggling companies [4][6]. - Historically, companies that conduct forward splits have outperformed the S&P 500 in the 12 months following the announcement [7]. Group 2: Meta Platforms - Meta Platforms, part of the "Magnificent Seven," has never completed a stock split, with shares fluctuating between $600 and $800 in 2025 [9]. - Over 29% of Meta's outstanding shares are held by retail investors, indicating a strong incentive for a stock split [11]. - Meta's growth trajectory and substantial cash reserves, nearing $44.5 billion, position it well for a stock split to attract more retail investors [15][12]. Group 3: Goldman Sachs - Goldman Sachs has also never split its stock, with shares rising from $60 to $879 over 26 years [19]. - More than 30% of Goldman Sachs' shares are held by retail investors, suggesting a potential need for a stock split [20]. - As a key component of the Dow Jones Industrial Average, a stock split could reduce its influence within the index, but long-term growth prospects may necessitate a split [21][22].

Group 1: Market Overview - The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have seen year-to-date gains of 14%, 16%, and 20% respectively as of December 12, 2025 [1] - The focus of investing should be on future opportunities rather than past performance [2] Group 2: Investment Strategy - The company has increased cash reserves for future investments while maintaining a long-term focus on 36 positions, with the top 10 holdings accounting for over 81% of invested assets [3] Group 3: Company Highlights - **SSR Mining**: The stock has gained 219% year-to-date, driven by rising gold and silver prices and potential reinstatement of its environmental license at the Copler mine [5][6] - **Teva Pharmaceutical Industries**: The company is shifting focus to high-margin drug development, with the drug Austedo expected to generate over $2 billion in sales for 2025 [7][8] - **iShares 0-3 Month Treasury Bond ETF**: This ETF is used to manage cash reserves, offering a yield around 4% compared to a negligible yield on uninvested cash [9][10] - **Meta Platforms**: The company has significant ad-pricing power and closed September with approximately $44.5 billion in cash, on track to generate over $100 billion in cash from operations in 2025 [11][13] - **Bank of America**: The bank has been a long-term holding, facing challenges from recent Federal Reserve rate cuts but still generating profitable loans [15][16] - **PubMatic**: Positioned well in digital advertising, with connected TV ad growth exceeding 50% year-over-year and positive operating cash flow [17][19] - **First Majestic Silver**: The company has seen profit projections rise due to higher silver prices, but management struggles with mining costs have led to a reduction in holdings [21][22] - **Pinterest**: The platform has reached 600 million monthly active users and has potential for improved monetization, with a forward P/E ratio of 13 [24][26] - **PayPal Holdings**: Despite stalling active account growth, payment transactions per account have increased by 41%, and the company has initiated a quarterly dividend program [29][30] - **Alphabet**: The company maintains a dominant market share in internet search and is expected to see growth from its Google Cloud platform, particularly with AI integration [31][33]

Core Viewpoint - The article discusses the potential for Meta Platforms to become a leading candidate for a stock split in 2026, highlighting its strong market position and operational performance in the context of the ongoing interest in stock splits among investors [1][12]. Group 1: Stock Splits and Market Trends - Stock splits have gained attention on Wall Street, with investor enthusiasm contributing to market rallies [2][4]. - A stock split allows companies to adjust their share price and outstanding share count without affecting market capitalization or operational performance [4][5]. - Forward splits are typically enacted by companies that are outperforming their peers, while reverse splits are often associated with struggling businesses [5][6]. Group 2: Notable Stock Splits - Netflix completed a 10-for-1 forward split in November 2025, reducing its share price from over $1,100 to around $110 [7]. - O'Reilly Automotive announced a 15-for-1 forward split in 2025, benefiting from a strong share-repurchase program and increased vehicle retention by consumers [10][11]. Group 3: Meta Platforms as a Candidate for Stock Split - Meta Platforms has never split its shares and is positioned to become a significant stock-split candidate in 2026 due to its high share price and a growing base of retail investors [15][16]. - Over 29% of Meta's outstanding shares are held by non-institutional investors, indicating a strong incentive for a stock split to make shares more accessible [18]. - Meta's operational performance, including a vast user base across its social media platforms and the integration of AI in advertising, supports the case for a stock split [21][22][23].

Core Insights - The article highlights the increasing interest of billionaire money managers in AI stocks as a significant investment trend for the upcoming year, with a focus on three key companies: Alphabet, Nvidia, and Meta Platforms [1][2][4]. Group 1: Alphabet (GOOGL) - Alphabet has been a consistent choice among billionaire fund managers, with notable purchases including 17,846,142 Class A shares by Warren Buffett and additional stakes by Coatue Management [5][6]. - The company holds a dominant position in the internet search market, capturing 89% to 93% of global market share over the past decade, and benefits from strong advertising pricing power [8]. - Alphabet's Google Cloud is integrating generative AI solutions, contributing to a revenue growth rate of around 30%, positioning it as a potential primary revenue source in the future [9][10]. Group 2: Nvidia (NVDA) - Nvidia is recognized as a leading player in the AI revolution, with significant share purchases by investors like David Tepper and Dan Loeb, indicating strong confidence in the company's future [12][13]. - The company dominates the AI-GPU market, with no significant competition challenging its hardware capabilities, and plans to introduce advanced chips annually [14]. - Nvidia's CUDA software platform enhances customer loyalty and maximizes the performance of its GPUs, further solidifying its market position [16]. Group 3: Meta Platforms (META) - Meta Platforms has seen increased investment from billionaire fund managers, with multiple new positions and additions to existing stakes during the third quarter [18][19]. - The company generates approximately 98% of its net sales from advertising across its popular platforms, which attract a daily average of 3.54 billion users [20][21]. - Meta is leveraging generative AI in its advertising solutions, potentially improving ad performance and pricing power, while maintaining a strong cash position of nearly $44.5 billion [22].

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Core Insights - The article highlights that while Nvidia and Palantir are currently favored in the AI sector, there is a more attractive investment opportunity in Meta Platforms, which is less susceptible to market volatility and AI hype [1][12]. AI Market Potential - Artificial intelligence is expected to add $15.7 trillion to the global economy by 2030, indicating significant growth potential for companies involved in AI [3]. - The current phase of the AI revolution is likened to the early days of the internet, suggesting that there are still investment bargains available in AI stocks [4]. Nvidia and Palantir Analysis - Nvidia has a dominant position in the GPU market, holding over 90% market share in AI-accelerated data centers, and has a market cap of $4.541 trillion [6][7]. - Palantir's software is irreplaceable for military operations, leading to steady double-digit sales growth and long-term government contracts, with a market cap of $410 billion [7][9]. - Both companies face historical headwinds, including the risk of a bubble burst similar to past technology trends, and their high price-to-sales (P/S) ratios of 29 for Nvidia and 125 for Palantir indicate unsustainable valuations [8][11]. Meta Platforms as an Investment - Meta Platforms is positioned as a more stable investment, with 98% of its revenue derived from advertising, which is less affected by AI market fluctuations [15]. - The company boasts an impressive user base of 3.54 billion daily active users across its platforms, providing substantial ad-pricing power [13][14]. - Meta is utilizing AI to enhance its advertising effectiveness, which mitigates risks associated with an AI bubble [17]. - With over $44.4 billion in cash and a forward P/E ratio of 21, Meta is well-equipped to invest in growth initiatives without immediate pressure for returns [18][19].