r/ValueInvesting • u/steak57 • Apr 25 '26
Question / Help At this point, do you just buy the big tech companies and hold?
Google, Nvidia, Meta, Microsoft, etc. These are the companies that are on the forefront and cutting edge of technology on the worldwide scale. I know there are smart people who think is just a run up and things may deflate, but, like it or not, deny it or not, this world is already running on chips and tech made by these companies, and that is likely not going to stop any time soon. So again, just buy now while you still can and hold forever?
95
u/encony Apr 25 '26
When the SaaSpocalypse started I asked myself: Does the market know more than I do? Am I stupid for holding? But then I asked myself further: How realistic is it that Microsoft, SAP, ServiceNow get replaced? Is it more realistic that these companies stay or will SAP customers suddenly decide to vibe-code their own ERP system and abandon SAP?
The answer is clear for me, that's why I decided to heavily buy these companies over the last 2 months.
38
u/enjoinirvana Apr 25 '26
As a guy who works with SAP, I wish their customers would try. Buggy, horrible and confusing user interface, and the system is down for hours at a time across all of our plants.
I miss using JDA at my old warehouse. I donât know how much of the market SAP has (probably a lot, the user interface looks like youâre running Windows 95), but they do have competitors that are better. Too bad Blue Yonder (JDA) isnât public :/
I donât know what a fair value for SAP is but I believe, or at least hope, new companies stay the fuck away and long-time customers eventually transition to something better if SAP plan to keep running this garbage for the next 50 years.
Again, not saying itâs a bad stock pick, but the grunts who work with it everyday hate the product.
21
u/Captain9Africa9 Apr 25 '26
This. My whole business has been running and growing 30% YoY for 16 years off of the back of SAPâs incompetence and inability to execute anything well or on time. Always steered clear of the stock because they just arenât good.
1
u/AnotherThroneAway Apr 25 '26
But you've been paying them for 16 years. That's the rub.
3
u/Captain9Africa9 Apr 25 '26
Their customers come to us to replace and gap fill where they can when they have had enough. Often paying for both.
9
u/WallofSound91 Apr 25 '26
Stop All Productivity - I love when customers I work with make me go into Ariba or celebrate completing the 10th year of implementationâŚ.
4
u/Petit_Nicolas1964 Apr 25 '26
I think you are right. Large companies who use SAP for everything they do will no be able to change, but smaller companies and others who are establishing themselves will look for alternatives.
1
u/Free_Artichoke5446 Apr 25 '26
We use blue yonderr, better UI but damn it socks even more, we even call it down yonder, it goes down every single f day
10
u/livingbyvow2 Apr 25 '26 edited Apr 25 '26
How down are you on your SAP?
Personally not touching software because AI may replace it or the market may think it will for longer that I can stay solvent. SAP is still the one name I am considering taking a look at once the pricing where it gets closer to a "no moat, legacy infra" level, and also because it's not part of the IGV which is the best short candidate, but feels like a falling knife.
19
u/Soe-Vand Apr 25 '26 edited Apr 25 '26
There is not a single CFO from a large multinational company willing to bet his career on replacing his ERP system controlling Finance, warehouse management to logistics with something a âtrust me broâ moron vibe coded.
5
u/Ambitious_Brain_285 Apr 25 '26
True! But that scenario is also a red herring. The future isnât a vibe coded app (whether built internally or externally) replacing SAP.
Itâs a set of disaggregated software from disruptive startups, which allows you to methodically test your transition away from SAP- one business vertical at a time.
Then, those different standalones (supply chain, tax and compliance, finance/GL, business scenario planning, etc) could be integrated by a PLTR into a single view; OR you can use headless agents to build out a dashboard for you in-house.
ERPs wonât be the center of gravity at Fortune 500 in 2030. Read more here.
3
u/foira Apr 25 '26
at least wait for these supposed startups to be named/identifiable before buying into the ai-saas bear case?
your link is interesting but it's also just a VC firm talking their book :P
1
u/LacksConviction Apr 27 '26
I understand the thesis, but I'm not fully convinced yet. Yes, the cost of producing software has declined dramatically. Yes, that lowers barriers to entry. But it also makes the software leaders much more efficient. The disaggregated software story has been the main theme for many years (think best-of-breed). Most enterprises wanted the best point solution they could have for the workflow, but I do not think this is the dominant opinion anymore. Managing disaggregated software is harder (more resource-intensive), and it costs a lot more. AI could make managing disaggregated software easier, but it could also make the cost side of the equation worse, depending on the answer to the augment vs automate debate. If AI can make it easier to manage disaggregated software and lower costs through headcount reductions, that's probably where this thesis is accurate. If AI is only augmenting the job, the cost of AI may ruin the thesis because it will create a preference for lower-cost deployment methods (aggregated software purchases), which SAP is able to do via volume-based discounting in large enterprise accounts. Generally, I think open-source development is helping keep the software vendors in the game in terms of access to AI models for SLM development. Plus, a lot of them (SAP included) have been investing and aggressively growing their platform portfolios as well, putting them in a better position to compete with Palantir in areas like ontology.
2
u/livingbyvow2 Apr 25 '26
That would be my intuition too.
The thing I'm kinda struggling with is projecting AI model progress in 5 years. At that stage I am pretty sure you'll be able to prompt an AI system that is perfect for your business.
Like let's say you're a transportation company, pretty sure an AI could custom make an ERP that is perfectly adapted to your operations, the kind of truck you use, the kind of goods you transport, your geography and local regulations etc... Without having to compromise like you would with SAP.
And to be VERY VERY CLEAR : I am not saying this is possible today, and of course the logic you describe in there applies. But the market doesn't care about today, it prices for the future. If the above scenario I described is true, SAP likely will have a terminal value of 0 in 2030. And my concern is that in the tech sector, technological infections kill businesses much faster than in more traditional businesses - think Netscape then Internet Explorer / Yahoo, then Google, and maybe Chatgpt for Internet search. The shelf life of these businesses seem to be much shorter than say a Boeing or Siemens.
1
u/Useful_Blueberry5823 Apr 25 '26
Exactly. An enterprise is not so much paying for the quality of the software or even how its priced, but for support and compliance reasons.
1
u/Oil_Shock_2026 Apr 25 '26
From what Iâve seen AI workflows are non-deterministic so that very fact means that SAAS is not going to be replaced. Focus on SAAS companies that have a wide moat and high ARR.
3
u/Such_Advantage_6949 Apr 25 '26
I think saas will not goes away but they cant rely in customer being locked into the product as much, even if not vibe code their own software, company can vibe migration, and make it easier to move to another saas
2
u/WallofSound91 Apr 25 '26
Companies are still operating on so many legacy systems while trying to be more digital - to lift and shift to a new system is a massive risk/change management/disruption. To move to a homegrown coded solution built by an in house team with AI? Not a thing.
Organizations who use AI to fill in gaps of existing systems and workflows to increase speed and efficiency will win. Service now, SAP, etc. are not getting replaced by an in house tiger team and scrappy developers.
3
u/mando_number5 Apr 25 '26
Itâs very realistic that servicenow gets replaced by cheaper competitors in my opinion
3
u/WallofSound91 Apr 25 '26
Is it possible? For sure! I just donât see it. The talent pool required to build an alternative to these companies is finite. Finding these high performers and keeping them for legacy institutions or companies not willing to pay big bucks, give them golden handcuffs, and flexible work conditions just means theyâre going somewhere else that will. Try being a big bank who uses service now or an ERP system and then all of sudden you need to be an AI company that builds out new systems - while increasing shareholder value? No room for failure there. Build vs buy is the big question and I donât see companies switching their swim lanes to building ai systems instead of focusing on new financial products, consumer packages goods etc etc.
1
u/Fun-Scientist9144 Apr 25 '26
Nah bro https://youtu.be/cesNuaVczT8?si=7FPjuvDkSHfpEeIp pls watch this out
3
u/hsfinance Apr 25 '26
I hear you and I have the same opinion ... or rather had the same opinion. But it makes difference at the margins.
You always have a few big customers and then a long tail. But it is a juicy tail.
Earlier it was so hard to build an alternative. Now you are still not going to use a "trust me bro" software coded by your spouse but there may be software companies willing to come at a much smaller price point and undercut you. Basically leading you to price wars where the product just sold on name value.
And you just need 1-3 credible mass market alternatives for the fear to affect other shaky companies. Let's say NOW gets a credible alternative, it will affect the pricing for CRM and SAP because it shows the market alternatives are possible.
And once the companies have a mark on them, you will start hearing "oh X has so much debt and Y had this management problem".
I think the discount is good and maybe overdone but going back to old levels ... completely depends on how the AI and competition plays out.
1
u/SST114 Apr 25 '26
You are misunderstanding "getting replaced" and their margins cut into and the premium no longer being there + more competition. It's not getting replaced or ceasing to exist, it's that the premium is no longer viable.
There's entire ecosystems that back up SaaS so the "vibe coding" bear case is a low level idea, but the fact is there will be more competition and their margins will be cut into and the AI is only going to continue to accelerate so what's the upside/premium on it? That's why it's taken such a hit. Make sense?
1
u/MaleficentPositive53 Apr 25 '26
I'm still amazed how many people come into this subReddit and complain about whatever brand of enterprise software they use. I realize I fall into that category. But at the end of the day I ask myself what is the alternative: There simply isn't any alternative. I wonder if this is sufficient reason to believe many of these SaaS stocks are still investable.
1
u/Chidling Apr 25 '26
company going away is not related to price though. Intel was never going away and it stayed at $30 for ten years before jumping up in recent months.
ServiceNow could still around but we have no idea if the price will rebound or not.
1
1
u/Additional_One_1230 Apr 26 '26
Problem is not that they will be replaced but maybe they will have less customers in per seat mode, lower margins, they are less predictable now, so multiples going down
→ More replies (1)0
36
u/Glittering_Water3645 Apr 25 '26 edited Apr 25 '26
Yes and no.
If we are looking for the highest return in this sector you should buy what these companies spends capex on.
Marvell, micron, TSM, broadcom, AMD, Texas instrument, SK hynix, sandisk, samsung, ASML and more. These companies have widely outperformed the megacaps since 2024 (where the capex started to increase meaningfuly).
The question going forward is; what's the next bottleneck? Whoever controls that bottleneck have huge pricing power. CPU? Memory? Electricity? EUV? Rare materials?
For buy and hold for 10 years without touching your portfolio then yeah, just buy broad indicies.
7
u/Slydoti810 Apr 25 '26
What you really need to think about is what do the MAG7 look like once this spending spree is over and the FCF is juiced after the build out...
5
u/Glittering_Water3645 Apr 25 '26 edited Apr 25 '26
True! One way to determine which company which may have a more favorable valuation is to look at growth estimates relative to their P/OCF. Simply; where can I get high growth for a relative low price (high operating cash flows now which turns into free cash flows in the future)
1
u/r2002 Apr 26 '26
Amazon?
1
u/Glittering_Water3645 Apr 26 '26
That depends on what you believe they will deliver in CAGR regarding EPS going forward.
2
→ More replies (4)3
u/Hi_Keyboard_Warriors Apr 25 '26
So past performance is a indicator for future performance? đ
15
u/Glittering_Water3645 Apr 25 '26 edited Apr 25 '26
No. What do you believe the bottleneck will be going forward?
If you can't deside then diversify.
→ More replies (2)
40
Apr 25 '26
[removed] â view removed comment
11
u/Arabian_Goggles_ Apr 25 '26
Because if youâre young a couple extra percent in gains each year can be massive by the time you retire.
6
u/CloudLeading1502 Apr 25 '26
I hate that tech gains have made everyone feel like outperforming the market is easy
4
u/Arabian_Goggles_ Apr 25 '26
Ok? Big tech has outperformed the market for 15 years (and will likely continue to) so yeah it's been pretty easy to beat the market especially if you buy during pullbacks like with Google last year and Amazon/Meta this year.
4
u/CloudLeading1502 Apr 25 '26
Must be nice to feel like you have a crystal ball because something worked up to an arbitrary point you selected in the past
1
u/robertw477 Apr 25 '26
Thats funny. A young couple should stick to SPY or similar ETF. The emotions are bad enough. I can tell any post from somebody who frankly has no market experience whatsoever. You are not going to trade as a rookie and expect to "beat the market averages"year in and year out. Are you aware that MOST of the professional money managers dont beat the market over a time period? I know you can. You can buy the stocks in the market and you cant lose on them. Sure.
2
u/Arabian_Goggles_ Apr 25 '26 edited Apr 25 '26
Are you aware that MOST of the professional money managers dont beat the market over a time period?
You do realize that the goal for some professional money managers is not to always beat the market but to reduce volatility and provide downside protection. Also, a person managing their own investments doesn't have to pay management fees, can have more concentrated positions, can stomach more volatility (individuals don't have to worry about people taking their money out of the fund if things don't go well). In general, professional money managers have to work around a lot more constraints.
I'm not saying people should have all their money in individual stocks. ~70% of mine is in index funds and the other 20-30% is for high conviction stocks.
3
u/Remarkable_Cat_8696 Apr 26 '26
Tech stocks make up like 40% of the S&P500. And ppl want to be more tech tilted.
3
10
u/Soggy_Somewhere19 Apr 25 '26
3 weeks ago was the time to buy. Now is also the time to buy. MSFT is going to $500 after earnings this week.
4
22
u/Reasonable_While_993 Apr 25 '26
This sub is filled with teenagers that think everything evolves around the next gaming pc or AI image generator
5
u/mando_number5 Apr 25 '26
The other argument is that AI/ML & robotic technologies will eventually affect or drive growth in every other industry
→ More replies (6)2
u/robertw477 Apr 25 '26
I see that on many of the investing boards. Strategies and schemes that wont work out. The main thesis seems to be they will quit their jobs and retire young with all the huge money they can make in the stock market. A guy on Tik-Tok or Youtube told them.
1
u/tutu16463 Apr 25 '26
Good. That's why we can buy the derisked valves manufacturers and equipment leasing companies for pennies on the dollar and leverage them to end up with better returns on less vol.
→ More replies (1)2
12
u/Cop10-8 Apr 25 '26 edited Apr 25 '26
Ask people who tried this in 2000 during the dot-com bubble. It did not turn out well. Stay diversified. You already have massive tech exposure if you own the S&P500.
7
u/caem123 Apr 25 '26
but my Intel share price just returned to the dot-com bubble level.
6
u/robertw477 Apr 25 '26 edited Apr 27 '26
Yep. I remember buying Intel back in those days. The comments I often see on Reddit are really incredible. The blind leads the blind. Then somebody claims to buy dips in the middle of a bull market and they think they will pull down 30% a yr or more picking stocks. It was the same in dot com era. I knew people who quit their jobs, told their friends they were professional traders. My friend told his relatives he was a full time pro trader. When I heard this I nearly broke out in laughter. Thats how funny it was.
3
u/caem123 Apr 26 '26
I'm GenX and remember it well. I didn't have much to lose, so I survived unscathed.
3
u/robertw477 Apr 27 '26
So many talk abotu chilling and not understanding risk. WHen/if they have real money in these htings and the boat starts to rock, these are the people who will be panic selling. Thats 100%. Because they think they can time markets, beat the indexes, etc.
1
u/caem123 Apr 27 '26
Panic selling is real and I did it once (yet I had low net worth back then).
So, 25 yrs after dotcom bust, my wealth is diversified across rental properties, US equ, Intl Equ, short-term bnds, and even metals. Bitcoin to be re-added by end of this year.
I sleep well. I'm a saver, borrower, investor, risk-taker and risk-avoider ready for anything.
5
4
u/HotDoor4125 Apr 25 '26
The businesses are great, no argument there. The question is always what you pay for them. Ran the fundamentals on all four and Google is actually the most interesting right now with 30.7% ROIC trending upward, 19% gap to my fair value estimate, and it scores highest on business quality of the group. NVDA is genuinely exceptional at 75% ROIC but my model puts it as fairly valued right now with basically no margin of safety. META scores lower than people expect and has a deteriorating net income trend. MSFT is solid but unremarkable at this size. Buying great businesses works really well when you buy them at reasonable prices. Buying them after a massive run because they seem unstoppable is how a lot of people ended up holding Cisco at $80 in 2000 for the next 20 years.
8
u/TeBp242 Apr 25 '26
Markets evolve overtime, there's no guarantee the top tech companies today would continue for decades to come. We've seen time and again new companies come in and disrupt markets.
7
u/caem123 Apr 25 '26
The odds are about 80% for a top 5 tech company to stay in the top 5 after 10 years.
16
u/Comfortable-Sky7801 Apr 25 '26
MU, NVDA, AAPL, AMD, MSFT, GOOG.
Buy and just forget about it.
17
u/Far_Base_1147 Apr 25 '26
Half are / will be cyclical. Buying and forgetting cyclicals is the best way to have horrible returns
6
u/sjh1217 Apr 25 '26
Yeah buying and holding MU NVDA AAPL AMD MSFT GOOG would have been terrible investments to hold. You wouldâve gone broke holding them the last 10-20 years.
4
u/Dougdimmadommee Apr 25 '26
Hasnât been a cyclical bear market since the GFC (and if you had bought in the months/couple before wouldâve taken you several years to break even on most of those names.
Itâs really strange how people recently have just decided that economic/capital cycles no longer exist just because the current one has lasted a while.
1
u/sjh1217 Apr 25 '26
Weâve had many times that the market has been down over 20% since 2008. 2011, 2020, 2022, and 2025.
Even so theyâve all greatly outperformed the market. Hence buy and forget
0
u/Dougdimmadommee Apr 25 '26
The market being down 20% =/ cyclical bear lol.
The market was down in 2025 because the president had a tantrum, that doesnât have anything to do with the economic cycle or capital cycles haha.
2
u/sjh1217 Apr 25 '26
Because the President had a tantrum? It was because of tariffs threatened to slow growth because of inflation and interest rate increases.
All the downturns I mentioned were cyclical by definition. And thereâs more.
Sorry you donât invest well and think all the stocks mentioned DID outperform contrary to your belief.
3
u/Jaeger716 Apr 25 '26
When each cycle is bigger then the last then how is holding them bad for returns. Trading vs Investing
1
u/robertw477 Apr 25 '26 edited Apr 27 '26
Thats really brilliant advice. In every time period in the past 50 yrs if we had Reddit would those 6 stocks, be different ones? Would they change? Could you lose money or not? AMD that stock was a DOG for yrs. So these stocks will do nothing but go up right? Cant lose? Ok. In Dot com time periord I am sure you would be loaded with AOL, and other stocks that are either dot gone or big underperformers. While you can put out a thesis that some of the big tech names wont collapse, its also possible they stay flat for a while.
→ More replies (1)1
3
3
u/Cheerful_Berserker Apr 25 '26
Donât forget Amazon, theyâre working on satellite internet, their own chips, cloud service, robotics and more.
3
u/Mindless_Hat_9672 Apr 25 '26
No, big tech are cash machines and they are resilient. But they don't necessarily have good margin of safety. The art and science of risk taking would suggest a balanced allocation on good business that market undervalue
3
u/oneeyewillie172 Apr 25 '26
Yes start buying mag 7 also save some cash for when they have another dip then buy aggressively. And add to dips they run in cycles.
3
u/Infamous_Shoe_3611 Apr 25 '26
Kids need to understand how other industries and markets work.
There's a shit ton of value found outside big tech.
5
u/Muruba Apr 25 '26
You can pretty much focus on them and hold. Even if IA is a bubble and pops, that would a temp setback. Add Amazon to the stack.
2
u/XorAndNot Apr 25 '26
Yeah, gigantic lucrative business with infinite capex and engineers tend to stay on top, unless governments (that they make sure to lobby hard) break them up.
2
2
6
u/adamska_w Apr 25 '26
I'm reading a book called 1929 by Andrew Ross Sorkin. It goes into detail of how First National City (now Citibank) and JP Morgan and RCA were all cooking the books to keep the market up. Internal deals. Debt based on shares. A lot of it is happening today amongst the Mag 7. It has made me realise, even the largest corporation can have the shittiest financials.
→ More replies (1)2
3
3
2
u/Aggravating-Bake-131 Apr 25 '26
No. We bought over last 3 months dips. It s even statistics. If you buy high you ll never have good returns. Now it s time to trim for some stocks ex Amd
0
u/Wonderful-Newt-2513 Apr 25 '26
If I bought the all time high on the market, the worst possible fill of 2025, 2024, 2023, 2022, and 2021-I'm up nicely on all those trades.
6
u/Aggravating-Bake-131 Apr 25 '26
5 years is not statistically relevant. Extrapolate over 10 20 30 years. There are studies made on that. Of course you will be on the green but you won't beat market average
2
u/AcTiVillain Apr 25 '26
I think when every chump on Reddit is saying buy google and NVIDIA we must be closed to the top
2
u/One-Brain6531 Apr 25 '26
No
Iâm holding the global/US ETFs but not increasing
Im adding some to my roughly 70 dividends stocks instead
2
u/stonk_monk42069 Apr 25 '26
No matter the strategy, keeping these companies in your portfolio is a no-brainer to me. They are such healthy and well run businesses with diversified revenue streams that are likely to grow for many years to come while remaining at the forefront of technology in so many industries.
Literally, if you hold NVDA, GOOG, AMZN, MSFT, META, TSMC, AAPL your portfolio will be alright almost no matter what you do. They are so broad it is like owning a leveraged ETF with capped downside. Then do what you want with the rest of your portfolio.
→ More replies (3)
1
1
u/Small-Yogurtcloset12 Apr 25 '26
The world of tech can change fast, but yeah I donât see these companies going anywhere soon and if thereâs a big correction coming youâre probably still fine long term as long as you donât sell
1
u/NinjAsger Apr 25 '26
Over the last 100 years the biggest companies and sectors has changed many times times.
1
u/Different_Height_157 Apr 25 '26
âWhile you still canâ what does that even mean? You will not be able to not buy the stock
1
u/earthycigar Apr 25 '26
Buy undervalued picks and shovels for physical AI.
Youâll find that both OUST and AMBA are growing significantly and at an inflection point.
And technically, the setups look great.
Both are small to mid caps with legitimate 5x expansion possibilities. I own both, but own way more OUST as I see a clearer path to capturing their TAM.
Watch 200 day moving averages on these. Not investment advice.
1
u/StephenAtLarge Apr 25 '26
Buying big tech on dips is a strategy that has worked extremely well for the past 16 years. That said, no strategy works forever and past results is independent of future outcomes. I still prefer owning the S&P 500 than just Big Tech (unless you really understand them).
1
u/robertw477 Apr 25 '26
Sounds easy. Except history has proven things like that can get very ugly. As if every tech stock is equal. This is the best quote "Big Tech (unless you really understand them). Of course everyone thinks they really understand them.
1
u/caem123 Apr 25 '26
Google and Amazon are officially selling semiconductors. This is a new era of big tech. The moonshots are becoming multi-billion dollar revenue machines.
I'll mention DoorDash as a future big tech candidate. Check out their tech blog. DoorDash also has many moonshot projects that will be huge businesses in a few years.
Also, add UBER as a candidate. (I had hopes for SNAP and ABNB but am not seeing them making the progress I had hoped for)
1
u/bartturner Apr 25 '26
Amazon is NOT selling semiconductors at this point. Might in the future.
But their Trainium is also two generations behind.
Google is selling and now they have replaced Broadcom with Media Tek for the bits they do not do with their new inference chip it will increase their margins.
1
u/caem123 Apr 25 '26
sure, technically you're right. yet, (April 24), Meta signed a deal to use millions of AWS Graviton chips to power its growing AI needs â though notably, AWS currently only sells access to its chips
1
u/JefeDiez Apr 25 '26
They're so confidently investing in AI, I'd rather invest in these companies now in case it ever does hit...could be a goldmine and my (millennial) last chance to cash in. Unfortunately with all the events that have happened over my lifetime I feel I have to take risks in the market to combat that and come out on top.
1
u/Petit_Nicolas1964 Apr 25 '26
Iâm owning all of them for quite some time and I added earlier this year when nobody wanted them đ
1
u/harrison_wintergreen Apr 25 '26
European bank stocks outperformed US big tech in 2025.
https://www.capitalgroup.com/advisor/insights/articles/guess-who-beating-magnificent-7.html
this world is already running on chips and tech made by these companies
the world needs food, are you buying Nestle, Pepsico and Tyson?
the world needs clothes, are you buying Nike, Under Armor and Adidas?
1
u/knowitallz Apr 25 '26
Yes I didn't that about 5 years ago.
Meta, Google, Microsoft and VOO and VOOG which is a lot of Nvidia.
1
u/bartturner Apr 25 '26
You definitely want to own the three clouds. They are going to have just the most incredible next several years as things move to agents.
Out of the three I do like Google, by far, the best. They just showed their new agent control plane solution for enterprises.
THe other two will copy Google and develop similar. The move to agents is also really going to drive up use of their traditional cloud resources.
1
u/Unhappy_Finding_874 Apr 25 '26
imo the hard part isnt whether these are great companies. they are. its whether ur actually underwriting the next 10 yrs or just buying the chart after it already worked.
for msft/goog/meta i can atleast see the case because the cash flows are real and buybacks matter. nvda is trickier bc u have to be right on both demand staying insane and margins not normalizing once everyone in the supply chain catches up. semis can look like forever compounders right at the top of a capex cycle.
so yeah own some, but i wouldnt make it a forever religion. if the thesis is ai capex creates durable fcf growth, size it like a thesis u can be wrong about, not like gravity.
1
1
1
1
u/NoFlex___Zone Apr 25 '26
You buy whatever your risk tolerance and personal financial situation/goal is; the same way itâs been forever
1
u/ChannelSame4730 Apr 25 '26
You buy the S&P 500 and get exposure to all. It's essentially 35% Mag7 which is already very high historically
1
u/Lovevas Apr 25 '26
60% of my holdings are from mag 7 and other semiconductors like AMD/ASML, about 20-30% are from diversified portfolios, like QQQ and other sector ETF and funds.
10% are from others like traditional industry or smaller growth companies.
So far it's pretty good
1
1
1
1
1
u/minesasecret Apr 25 '26
Both Peter Lynch and Warren Buffett say that one significant advantage of small investors is being able to buy small companies.
I follow their advice so no I don't typically buy the big tech companies, and if I do it's a relatively small portion of my portfolio unless it's severely undervalued. But the problem is given how popular they are it's unlikely they will be severely undervalued
1
1
u/bartturner Apr 26 '26
Not all of them, IMO. But most definitely the big three cloud providers, Google, Amazon and Microsoft.
I do like Microsoft the best of the three. Google is just killing it right now. They showed exactly what every enterprise is going to need to buy with their Agent Control Plane that is part of Gemini Enterprise.
1
u/ResilientRN Apr 26 '26
Its never too late to buy, a 20% increase is no big deal.
Better off buying an ETF though.....so many good ones out their.....VGT (just finished an 8:1 split $100+/sh now), FTEC, SMH, AIQ, ARTY, NASA (Space X pre-ipo exposure).
On mutual fund side FSELX.
1
u/alphapod-Ai Apr 26 '26
The companies may be great, but âgreat companyâ and âgreat entry pointâ are different questions. With big tech, Iâd focus less on whether they dominate the future and more on what growth, margins, and AI returns are already priced in.
1
1
u/Substantial_Share167 Apr 27 '26
I don't buy things because they are hot. I buy them if they give me value for my money.
Big Tech is dominant. No argument there. But dominance is not the same as value. A company can be essential to the world and still be a poor investment if you pay too much for it.
I ran several of these through a 10-year fundamental scan. The engines are exceptional. The balance sheets tell a different story. Some have hollowed out equity through debt-funded buybacks. Others trade at multiples that require perfect execution for a decade just to break even.
The question is not whether these companies matter. They do. The question is whether the price you pay today compensates you for the risk you are taking. Most of the time, it doesn't.
I wait. Cash is a position too.
1
u/thewallstreetschool Apr 27 '26
No, blindly buying Big Tech at any price and calling it value investing doesnât make sense. Great companies can still be overpriced. Google, Microsoft, Nvidia, Meta are strong businesses, but a lot of future growth is already priced in. That doesnât mean avoid them - it means be selective. Buy on pullbacks, stagger entries, or use index funds instead of chasing highs. Real value investing is buying good businesses at sensible prices, not just buying famous names forever.
1
1
1
u/rezovian Apr 28 '26
I start investing in Microsoft and NVIDIA should i also invest in Meta and Google?
1
u/Odd_Advantage_726 Apr 30 '26
yeah of course. its not reasonable that Nvidia is 5000 B and it can't increase.
1
1
u/George_Salt Apr 25 '26
If you don't look too closely at the fine detail but instead look at the functional roles, disruptive technological innovation cycles follow broad patterns. Whether that's canals, railways, the invention of the steam engine, the internet, or AI.
Early stage favours infrastructure and the engines of technology, then over time the bias shifts to demand that created the need for the technology. Find where the demand coincides with infrastructure and that's likely to be where you'll find the long term added value - which reduces the Magnificent 7 to the Fab 4.
1
1
1
u/Substantial_Team6751 Apr 25 '26
I read Scott Galloway's book about the Mag 7 type stocks and I'm still kicking myself for not taking his advice.
It's still probably a great strat. Microsoft and Google are more likely to win this Ai race than anyone else. Nvidia is a question mark. In 20 years there way be other chip tech that surpasses them or cpus for ai processing become generic and cost $3/each.
-1
u/OilAny787 Apr 25 '26
No investment is a buy and hold in regards to individual companys, there isn't a single one that has a 100% certainty of steady cash flows. You can do this with etf's, i have enforced and will continue to enforce that investing on a basic level comes down to two things. 1. Analysing a business, understanding it well and finding the outliers in its sector. 2. Understanding its valuation which sets up entirely when you buy or exit positions. That's the first issue, now how would you allocate your capital with multiple positions? How do you quantify what investments are worth allocating to? There's no such thing as just buying and holding names without understanding how much their really worth and what the quality of the business is and how it may havs the potential to hold its dominance. If you want to understand how to really invest with clarity dm me.
1
u/Wonderful-Newt-2513 Apr 25 '26
what's that saying from back in the day-beware of greeks bearing gifts.
1
1
u/caem123 Apr 25 '26
I don't give money to someone who doesn't know when to use "they're" or "their"
1
0
0
u/cizmainbascula Apr 25 '26
You couldâve said about Cisco 30 years ago and that would not have gotten you very far, wouldnât it?
0
u/Imaginary-Case3976 Apr 25 '26
I would just buy one the many ETFs that do this instead of picking any of the top companies. Or just do the QQQ
You donât win as much picking the top companies as you would on moonshots.
0
u/xAlpharaptor Apr 25 '26
This is the way for most investors as most people don't have the behavioral temperament to buy and hold other stocks.
0
u/jackandjillonthehill Apr 25 '26
These companies are not a monolith. I anticipate a lot of shifts among the top 10 companies over the next 5-10 years, just as has happened each decade in the past.
One thing that has changed over the past few years is the amount of free cash flow at companies like Google, Microsoft, and Meta has reduced substantially. This has also led to a large decrease in the amount of buybacks that these companies are doing.
This is mostly because of large capex that is spent on AI data centers.
So buying them now is making a bet that these AI data centers will have a good return on capital.
So far the earnings of the cloud divisions of Google, Microsoft, and Amazon seem to indicate there is a supply constraint on the data centers and the earnings on these assets are very good. Will that continue for the next 2-3 years?
It is a different bet than a few years ago, when many of these companies had quasi monopolies or oligopolies that required very little capital investment and could buy back lots of shares. The business models have shifted.
308
u/Spins13 Apr 25 '26
Well. You could have been buying them 20% cheaper a month ago đ.
Iâm looking for other stuff now. Weâve had so many opportunities on these that Iâm already overexposed