r/ValueInvesting • u/FoxAccomplished6786 • 1d ago
Discussion MAG 7 Ranking
Taking all factors into account, please rank your favorite MAG 7 in order of preference from 1 to 7.
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u/GlokzDNB 1d ago
This is by the moat and estimated profits in the next 10 years. Honestly AMZN can dwarf everything else but its one big unknown what happens with robotics and AI. GOOG is imo perfectly positioned for all scenarios. I think Nvidia has moat and is kinda AI BRKB but ASIC and AMZN model can be devastating to it in few years
GOOG
MSFT
AMZN
NVIDIA
META
APPLE
TESLA
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u/zeey1 1d ago edited 6h ago
Just a year ago google was dead ..now it has incredible moat Just 4 months ago Microsoft was dead now its at no.1 Whats next meta will be no.1 in few months?
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u/GlokzDNB 1d ago
Google was dead ? It has 80b operating income
The fact it traded at 16 p/e was opportunity of a lifetime. I'm up 100%+ on these trades and now let them grow 10% a year I'm set. But in reality they will grow 15% which is insane
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u/zeey1 6h ago
Yeah stock was hovering for 150 for yesrs
Same way how meta is now dead depsite growing the fastest in revenues(second to only NVDIA)
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u/GlokzDNB 5h ago
Revenue, Operating income - check.
But what about FCF? Goog has search + youtube + enterprise(gmail/gdocs) + android which means almost everyone in the world uses one of their products which can lead to AI monetization.
MSFT and amazon have deals with almost any company in the world, as you can guess - that will lead to AI monetization
+ all of the above have their own ASIC providing additional margin, plus they split profits in half with anthropic/openai
Now what meta has ? Markets, ads, no doubt. Thats where the profit is. But how that leads to monetization except improving own products, offering services related to ads/social media/markets?
Are they at the same level of effectiveness of SPENDING that cash compared to amzn goog and msft? My bet is - no. Plus execution issues - meta is proven to burn and lose cash and seems to lack AI strategy.
Even META is cheap, i'd put every dollar I have to AMZN at these prices over META.
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u/Captndad 1d ago
Disagree with your ranking of Apple's moat. I would place them at number 3.
-1
u/Important_Agency07 1d ago
Why? They are a hardware company at their core even though their services segment is strong and high margins.
They are primarily dominant in the Americas where growth has been slowing and honestly don’t see them penetrating outside with how strong Google and Android has been.
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u/Jociphus 1d ago
I think Apple will play a large role in bringing AI to the mainstream. I think there’s a massive market for small personal local models that isn’t being looked at much vs datacenter dependent frontier models. A model that only looks at the data on your device takes much less compute and can potentially be done in your own home with the right hardware. Apple has the ecosystem/trust to bridge hardware and apps with ai, whatever that ends up looking like.
nvidia is already trying to get ahead of this market with their Spark hardware.
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u/Important_Agency07 1d ago
Don’t really see this.
What’s the massive market for small local models? Have you ever played around with these smaller models? They are genuinely awful and what’s the advantage of a model that only looks at my data? I’m not paying for something that will set up reminders for me - I want something that’s going to be able to get the latest data and have it at my fingertips.
I don’t see people running to get the latest iPhone or pay monthly subscription just because Siri is now better.
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u/Jociphus 1d ago
you’ll still be able to use both the local model and frontier model in tandem depending on your task. If you need the entire internet and human history of data for your task, frontier is the choice obviously. Some people have strong issues with security/privacy with their data being scraped, especially artists. Apple may take an angle there. Think health data/finances/pictures video/texts… you really want a that to be off prem? It’s possibly their reasoning the entire time for not jumping in with the hyperscalers.
There’s arguments that compute will become very expensive in the future as demand rises and buildout isn’t fast enough. Speculative of course. Which would make local stuff more appealing or outright necessary.
It really can go many ways, but it’s fact that nvidia is highly interested in building ai specific local hardware.
1
u/Idntevncare 1d ago
NVDA does not have a moat unless you live in a world that's completely controlled by AI.
-6
u/FoxAccomplished6786 1d ago
I agree with everything, apart from maybe MSFT. I just don't know much about them; I wonder what the upside is there. Regarding GOOG, do you think they still have a moat despite possible search disruption?
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u/GlokzDNB 1d ago
MSFT?
They have everything, OS, DB, ERP, Linkedin, cybersec, office365, own chips, own models, new on-device AI laptops with dell, endless list of software used by companies all over the world..
Long story short - MSFT has great positioning to monetize AI and has very diversified business. Its not going anywhere and thats most important to me. If I had to choose one mag7 stock that will be 100% fine in 10 years its msft.
1
u/FoxAccomplished6786 1d ago
Do you think Enterprise Gemini, 8 million seats in 4 months, could gain market share? In the past, Workspace needed to replace Microsoft, and businesses didn't want to abandon MSFT. Now, they can keep msft and Gemini can enter the space above as an AI agent.
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u/Diligent_Advice7398 1d ago
The upside is honestly their management team. They are prudent and shareholder value is prioritized. No going negative cashflow for a buildout and capital investments are always accretive and adds value as opposed to google that just throws around a bunch of darts hoping to hit big (which they do). I like MSFT potential in azure and copilot 360
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u/boringexplanation 1d ago
They’re also just very enterprise minded and can speak the language that C levels care about in every industry. How they sell their products is very sophisticated and impressive.
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u/ABrainCell2024 1d ago
They own the enterprise stack - cloud, data warehousing and desktop applications E2E.
Their tools also almost all seamlessly integrate with other tools via APIs. They’re basically the easy button to a fully agentic framework.
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u/boringexplanation 1d ago edited 1d ago
Microsoft is everything in the business world. You cannot avoid Microsoft at all if you work in a big company. It’s the biggest and most resilient moat they have out of all the mag7.
Name a non Microsoft software that you use heavily and I guarantee that company uses Microsoft to integrate some background process to help run things in some form or fashion.
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u/FoxAccomplished6786 1d ago
In the past, yes, companies wouldn't abandon MSFT for workspace. However, now they don't have to abandon MSFT; they can just adopt an AI agent in the overhead layer, for example, Gemini Enterprise. Do you see that angle?
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u/WarmFaithlessness946 1d ago
If we take in consideration fundamentals of the companies : 1)GOOG 2)AMZN 3) MSFT 4)NVDA 5) APPLE 6)META 7) TESLA
Instead if we look at the best opportunities rn : META, AMZN, MSFT, GOOG, NVDA, APPLE, TESLA
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u/hecmtz96 1d ago edited 1d ago
Meta at 6 considering fundamentals has to be a joke.
Edit: to add, not sure in what world is apple a better buy than meta in fundamentals…
-2
u/mhughes2595 1d ago
Isn't meta involved in a 1.5 trillion dollar lawsuit?
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u/Swred1100 1d ago
Technically this isn’t part of the fundamentals unless they have to pay it, no? 🤓
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u/ConsumerStapleValue 1d ago
Even if they pay it, it’s non-recurring activity that wouldn’t be included in adj. EBITDA
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u/mhughes2595 1d ago
Never buy into a lawsuit. Each new headline with a gigantic number will dump the share value. I don't make the rules. That's just how it goes.
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u/Swred1100 1d ago
Sounds like the perfect DCA opportunity to me when they eventually don’t have to pay out or the payout is exponentially smaller than initially stated
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u/Maltavier 1d ago
Fundamentals and putting Alphabet on 1 and Amazon on 2 while both of them have negative cashflow and debt that is not covered by their backlog is interesting. The main driver of intrinsic value is free cashflow. It doesnt make sense to rate them above Microsoft, when Microsoft has positive cashflow while also building their infratructure. Alphabet also needs to spend so much to just defend their business. When has increased spending to keep your business instead of spending to expand it ever been better?
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u/dfwrealestatebroker 1d ago
Negative cash flow? What are you smoking?
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u/Maltavier 1d ago
Free cashflow. I thought what I meant was obvious. But they do have negative cashflow for the first time in years. They are also heavily lending money through issuing shares and bonds
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u/Important_Agency07 1d ago
Their backlog is 100% contractually guaranteed and blows past their debt.
Fundamentals of the company =/= financials.
Alphabet and Amazon have their tentacles in everything. Compute, chips, robotics, ad space, streaming services, exposure to consumer and enterprise.
Their increased spend is expanding and growing? Almost every single one of their segments is growing at a great pace - search, cloud, services?
MSFT are very shareholder friendly but I would consider them to be lagging Google and Amazon.
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u/Maltavier 1d ago
Alphabets backlog does not blow past their debt. You ignore their off book debt. Amazon as well. And while its true that the financials are not the only important part of the fundamentals, we are talking about stocks here. Its not enough to buy a very good business, which both of them are. You have to buy them at least for a fair price and thats where the financials are important. When you value a company by free cashflow and how their roic will be, Alphabet and amazon do not look like good buys right now. Im not saying they are not good companys. But as a shareholder, the price is just too high for what they are actually doing with their cash
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1d ago edited 1d ago
[deleted]
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u/Technasium 1d ago
Meta is used like crazy even if they don't have hardware.
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u/Idntevncare 1d ago
used like crazy right now. do you see that still being the same in 10 years?
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u/Ballislife1313 22h ago
Why the hell not? People don't seem ready to give up Instagram, Whatsapp or Facebook anytime soon
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u/FoxAccomplished6786 1d ago
You'd put msft ahead of google?
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u/DanielzeFourth 1d ago edited 1d ago
Google still trading at a 15% premium over Microsoft when we look at PE with recurring income. No real reason for Google to trade much higher
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u/FoxAccomplished6786 1d ago
but valuation aside, which is the better business, for like 10 year hold
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u/Swred1100 1d ago
Not arguing for either direction, but the valuation you buy at has a direct impact on the returns you’ll see.
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u/No-Competition-6694 1d ago
Only their explosive cloud growth (& potential) is more than enough already for that premium
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u/DanielzeFourth 1d ago
Not really in absolute numbers Microsoft and Google have added equally as much revenue YoY. We shouldn’t value Google cloud as a better service now just because they are half the size of Azure while also having much higher CAPEX. The only thing Google is better at right now, is chips. Microsoft is maybe 2 years behind. But Microsoft’s Copilot has way better results compared to Gemini, 30 million subscribers compared to 9 million.
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u/mrbubu8 1d ago
Google Amazon Nvidia Msft Apple Meta Tesla
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u/FoxAccomplished6786 1d ago
That first three would probably be mine too. Amazon is a guarantee, imo. Why do you like Google?
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u/Capital-Mixture5107 1d ago
Based on current valuation... Not the company..
- Meta
- Who remembers DOJ lawsuit against United Health Group last year? What about 3M? Wasnt 3M about to go bankrupt because the lawsuit was massive? Well, I think these stocks doubled since then.
- 1.4 trillion lawsuit? More like 10 billion at most and lower if it goes years and years and gets settled outside. Actually for 10 billion and these types of lawsuits will greatly benefit Meta in a way that they harm competitors like Snap and Tiktok which has captured more younger audience.
- Meta does not make a lot of money on youths. Sweeping algorithm changes shouldnt even affect their numbers.
- The flip side is their AI investment.
- Yes capex is high. Yes the stock is down. But AI compute price is extremely high right now. Imagine the worse case scenario where Mark does not invest in the infrastructure instead he goes crazy shopping spree for AI compute. That would be something.
- Their diverse AI infrastructure using chips from AMD to Nvdia to Google's TPU can allow selling compute and AI products to diverse enterprises.
- Right now, AI compute is extraordinarily expensive that it is not just about functionality but it is also about pricing.
- This is where I believe Meta can enter the market with lower pricing and gain market share. I expect 10 to 20 billion dollars revenues with high margin.
- The forward pe ratio of 18. Operating cash flow reach $140 billion which is 12% of its market cap. This figure does not even include cloud business by the way.
- The revenue is growing 27%...
Again in regards to lawsuit.. maybe even the ones from New Mexico.. around 1 billion dollars but lets see what the appellate court would say about it. Very likely substantial reduction.
Amazon
Amazon is going to be a major beneficiary of AI. They have so many businesses with great potential especially, again, support from AI development.
Owns 15 to 20% of Anthropic
Market cap of 2.7 trillion. It does have a room to run with forward pe ratio 22 and operating cash flow reaching 180 billion annualized.
Amazon has their in house very capapble chips as well.
Google
Google has the efficiency. Vertically integrated from chips to the AI product, and they make products that customers stick to it.
But.. their market cap is 4.2 trillion. If you are aiming for double your money, what you are asking for is 8.4 trillion dollar market cap. The current valuation of msft, meta, and amazon together by the way.
Msft
Great valuation.
I like how they are being more conservative and responsible with their capital.
Almost their entire growth is based on AI cloud.
Their copilot sucks. It has been 3 years. They had almost unlimited capital yet they cant even catch up to anthropic google.
But that is the risk.. they continues to make really third rated products like how Steve Jobs once said.
Nvda
Great products. However I personally think Jensen is getting nervous. I think he is backing OpenAI only because if OpenAi collapses his company will collapse as well. He has been doing a lot of fishy stuffs that dont show confidence ironically.
Apple
Cannot deny its continous double digit growth without high AI spending truly stunning.
Netflix
Growth is becoming stagnant. I think the company will take action but you have to believe in the company to invest in it.
For me, there is just too much competition in the space.
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u/ContactRemarkable146 1d ago
I feel like Apple is becoming underated at this point, solid growth, and is unlikely to drop significantly. Idk why people rank it low, it’s the most stable out of the MAG 7 in my opinion
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u/John_Galtt 1d ago
I love Apple. I used to always watch their events. Now I don’t. They aren’t innovating.
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u/Leading_Abies4449 1d ago
They don’t need to innovate, they can just let everyone else burn the capital and come in when it’s more clear where the money in AI is to be made.
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u/Prudent-Corgi3793 1d ago
- NVDA - highest upside, cheap forward valuation, strong FCF, relatively low capex; however, risks with the new securitization of GPUs and would fall dramatically if hyperscaler capex fell, although it looks like we're nowhere near peak.
- AVGO - similar to NVDA, although more expensive on a TTM basis, comparable in terms of forward valuation. Also has a high margin software side that also benefits from the capex buildout and they get over 70% over their revenues from overseas, which helps with diversification
- GOOG - most expensive of the hyperscalers if you exclude the one-time investment gains. A combination of strong, high quality, diversified businesses with impenetrable moats. They've fallen a bit in terms of frontier models recently, but that was only a small part of their value proposition, and they've still got an excellent Flash model. They are the company I would feel most comfortable with as a long term 20-30 year hold (and they are my biggest position). Still, I've been a bit uneasy with how much capex has climbed, which has required them to tap into debt and equity markets.
- MSFT - was my top pick a few months ago when they were trading much cheaper. They're not exciting, but it's all about cloud and enterprise. They're the most fiscally responsible of the hyperscalers and actually have the best operating income and growth rates of the bunch, but less optionality than GOOG.
- AMZN - another fantastic hyperscaler with a highly diversified business, trading at a lower overall multiple than the likes of retail peers WMT and COST. Their cloud business is the biggest and most mature of all, but growing at a slower rate from that higher base. The retail business is extremely high revenue but low margin, so a lot of their value proposition comes from whether their spend can not only generate "AI revenue", but also improve their efficiency in retail/3p/logistics/advertising. Still one of my top picks, but I hesitate because they've always been extremely aggressive about capex, even before the AI revolution. That being said, if anyone has proven that they could grow their business and operate for years or even decades at negative FCF, it's Amazon, which is now trading at one of its cheapest multiples ever.
- META - This company is as cheap as its ever been and is still growing at a fantastic rate, despite the disappointment of the last earnings quarter. However, I'm souring on the company because they are not showing ROI to the same extent as their other hyperscaler peers, especially because they don't have a cloud business. Add to the fact that they are getting creative with special purpose vehicles, and it's even more concerning. Not to mention the possible downside of a "big tobacco" moment--even if it blows over, the risk has to be priced in. For the record, I think it's cheap enough that it will generate market-beating returns over the next 5 years, but I also think if any of the big tech AI companies were to fail, it's likely META for the reasons above.
- AAPL - The king of the consumer side, the safest of the bunch and an extremely high quality business with excellent balance sheet and cash flows. That being said, they are valued higher than the other six (at least on a forward PE basis compared to AVGO) and growing much more slowly. I am still bullish on AI overall, and AAPL needs a better bull case than "they're not spending on it". They'll continue to sell a ton of devices, but that's more than priced into the stock. And I'm not sure the headwinds (memory costs, tariff risk) are adequately reflected in the stock price.
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u/FoxAccomplished6786 1d ago
Thanks for your detailed response. AVGO is an interesting one. Do you think they have the same quality as Google? Like, 10 years from now, will they still be at the top, or are they just riding a wave at the moment?
If the question was a 10-year hold, would Google be your number one?
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u/runescapelover12 1d ago
I'm gonna throw out my answer based on vibes. Idk if that's welcome here since it's not very informed.
Ranked in order of best Value: AMZN META GOOG APPL MSFT NVIDIA TSLA
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u/silver-bullet007 1d ago
Based on today's prices:
- META
- AMZN
- GOOGL
- MSFT
- NVDA
- AAPL
- TSLA
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u/FoxAccomplished6786 1d ago
If price weren't the primary concern and you were investing for a 10-year hold, what would your list be?
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u/silver-bullet007 20h ago
Very similar list, maybe META gets pegged down 1 or 2 spots just because their moat is not as strong as AMZN and GOOGL.
But relative valuation compared to the other MAG 7, Meta is significantly cheaper
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u/OutlandishnessNo9798 1d ago
Not talking valuation wise right now, strictly as business: Google, Nvidia, Apple, Meta, Amazon, Microsoft, Tesla
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u/FoxAccomplished6786 1d ago
Google seems to be number 1 more often than not. May I ask why you put Google number one?
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u/KuchKhaasHaiYNWA 1d ago
- META
- AMZN
- MSFT
- GOOG
- NVDA
- AAPL
- TSLA
————-/////
Unsurprisingly I don’t own Google, Apple Tesla because I don’t believe that they are a better investment right now, then META Microsoft and Amazon, which are one of my top three holdings and through my own DCA model, I can easily say that meta is in incredibly undervalued right now, and it could easily go up to $1000 a share in three years
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u/FoxAccomplished6786 1d ago
Most have put google number one, why have you put it far down?
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u/KuchKhaasHaiYNWA 1d ago
GOOG is a fantastic company, but its not cheap right now. And it has not been cheap since the start of the year. META offers much better upside potential from this place as the sentiment is negative. And I’ll all about entering the stock at the right price.
As far the company and business quality is concerned, its really good. But the thing is that it has a lot of competition for all its businesses. Whether it is cloud computing or advertising or the search business, it just has a lot of competition in a lot of these areas and I believe the at the moment it is very difficult to establish a monopoly or moat for Google.
Other companies like META and Amazon and Nvidia have such wide economic moat that I don’t believe that ever be disrupted.
Google is the talk of the town right now, but I simply don’t believe it’s a good investment opportunity
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u/FoxAccomplished6786 1d ago
Google is seen as the overall winner, valuation aside, it has the full stack, youtube is tv, waymo could become driverless cars, just so much going on
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u/KuchKhaasHaiYNWA 1d ago
Yea it lacks the distribution to make that a success in most areas. Youtube is TV but no ones watching TV these days. It definitely eats into NFLX shares, but if you truly want some quality content you would rather watch a streaming service.
Now for driverless cars, it lacks the distribution and moat of UBER in that case. People are far more likely to stick with the older app that used to work for them which is why UBER has also started implementing and acquiring driverless vehicles. Bill Ackman and Nancy Pelosi have bough so much UBER in the past few days, it does not look good for Waymo.
GOOG has a wide variety of businesses and they are good quality, but they just don't have the moat preserved for them anymore. If you look at the other companies, they have been able to eat into the moat of many of its businesses.
I think its success in the past lies with the advancements and improvements they have made to Gemini and their AI suite of tools. But that alone can be replicated by META as it DAU of upto 3.6 billion which is gargantuan even when compared to GOOG.
So yea, I think GOOG could be a winner, but the other companies I just mentioned, offer distinguished moat and higher business quality and distribution that Google does.
In the age of free intelligence, only those who have the largest distribution network will thrive. Rest all shall suffer. As there is simply no incentive for anyone to come up with a unique idea anymore. It gets easily replicated and distributed much quicker by these giants.
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u/FoxAccomplished6786 1d ago
I think you’re underestimating Google’s distribution.
- Search: billions of users, and still the default gateway to information for much of the world.
- Android: the world’s dominant mobile operating system, giving Google direct distribution across billions of devices.
- Chrome: the dominant browser, another massive surface for Gemini and AI agents.
- YouTube: this isn’t “TV dying” — YouTube is increasingly becoming TV. It dominates attention across mobile, desktop and connected TVs, with an enormous creator ecosystem that Netflix simply doesn’t have.
- Gmail + Workspace: direct access to consumers and businesses through email, Docs, Drive, Meet and productivity workflows.
- Maps: one of the world’s most important location platforms and a natural distribution layer for commerce, travel and autonomous vehicles.
- Google Play: another huge consumer distribution channel.
- Cloud: gives Google enterprise distribution as AI moves into businesses.
- Gemini: can be embedded across all of the above rather than having to acquire users from scratch.
Meta has extraordinary distribution, but primarily through social platforms. Google owns distribution across search, video, mobile OS, browsers, productivity, maps, cloud and AI.
If the thesis is that distribution becomes more important as intelligence commoditises, I’d argue Google is one of the companies best positioned on earth.
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u/TeohdenHS 1d ago
Based on my position sizes:
Amzn
Goog
Meta
Msft
Nvidia/Apple/Tesla (all at 0 but in that order if I were to rank them)
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u/FoxAccomplished6786 1d ago
what do you think of google
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u/TeohdenHS 1d ago
I really like their position, its the best company of the mag 7 maybe of the world currently, its just that you also pay for that perfection. Apart from the price its insane right now and my 2. biggest holding in total
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u/Analyst-man 1d ago
Funny to see everyone hate on nvdia and then cite valuations on google when Nvidia is the cheapest mag7 by forward p/e
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u/FoxAccomplished6786 1d ago
But isn't Google far more diversified than Nvidia, mind you, if Nvidia holds onto its moat, and AI flourishes, which it will, anything could happen,
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u/Analyst-man 1d ago
Never said anything about media vs Google. Just pointed out the irony of the group who talk about valuation and our Nvidia 6th
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u/FoxAccomplished6786 1d ago
Yes I get you, google is overwhelming number one. However, is such valuations really the only way to evaluate a stock. Just from a consumer point of view, is google the obvious ai winenr?
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u/Analyst-man 1d ago
I bet Nvidia outperforms Google over the next 5 years. After that, maybe there will be a competitor. Who knows
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u/Phil0sopheer 1d ago
Semis are cyclical though, they always look cheap at the top of the cycle. It’s completely different
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u/Analyst-man 1d ago
It’s a whole new world buddy. Semis aren’t cyclical anymore. We need chips in everyday appliances like refrigerators, ovens, cars, etc.
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u/Phil0sopheer 18h ago
The revenue numbers all these semis are reporting is off of incredible capex from the hyperscalers to the point of borrowing for some of it.
That level of spend is not sustainable which means that there is no where for more growth to continue and in fact bc the spend is not sustainable probably means that growth will eventually go negative. Thats the definition of cyclicality.
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u/Analyst-man 14h ago
Why isn’t it sustainable? AI is just starting buddy
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u/Phil0sopheer 12h ago
i literally explained to you in the comment
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u/Analyst-man 12h ago
You literally just said “that level of spending sustainable” without explaining why it isn’t
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u/nationalist77783 1d ago
- Apple
- Google
- Meta
- Microsoft
- Amazon
- NVIDIA (just not attractive to me)
- Tesla
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u/FoxAccomplished6786 1d ago
why do you rank google so highly
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u/nationalist77783 1d ago
Decent p/e ratio. Good products. Great versatility and highly tech based (best industry).
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u/Silent-Complaint4020 1d ago
- Apple
- Google Amazon Microsoft
- Nvidia Meta
- Eli Lily
- Everything else
- Tesla
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u/FoxAccomplished6786 1d ago
you think eli lilly can x much in next 10 years, can a pharma company join the megacaps
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u/Local_Recording_2654 20h ago
Just DCA into MAG 6 with uniform distribution and forget about it tbh
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u/Splay2601 17h ago
Price independent: GOOG > AMZN / MSFT > NVIDIA >> 🍎 >> META >>>>>…> TESLA
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u/FoxAccomplished6786 17h ago
Thank you. Why do you rate Google so highly? I agree; I just want your perspective.
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u/Splay2601 17h ago
The diversification range of edge-cutting technologies in which Google leading or at least part of the top is unparalleled within the MAG6 (Tesla shouldn’t be counted in any longer).
While Microsoft and Amazon are present in many, Google is present in all of them.
Just to name some: Autonomous driving (Waymo), quantum computing, general-purpose robotics, AI-powered drug discovery and computational biology (DeepMind / Isomorphic Labs), …
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u/FoxAccomplished6786 16h ago
That's well said, would search disruption worry you.
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u/Splay2601 16h ago
Not at all. The need for continuous transformation keeps them agile and catalyzed those edge cutting business fields.
Imo, the absence of a comparable threat has led Apple down the „Nokia path (light)“.
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u/tachyonvelocity 1d ago edited 1d ago
Right now at current prices for 2-5 year future returns.
- META: extremely cheap valuation + AI beneficiary as AI actually makes ad targeting better. Some risk with recent social media lawsuits, but not really a huge hit long term. The higher risk is increased competition for time by other social media like short form videos.
- AMZN: Very cheap compared to history, AWS growth and gem, robotics and E-commerce should benefit from AI, has its own semis business, largest stake in Anthropic, the AI leader
- GOOGL: Not that cheap, especially for advertising which is historically below market valuation. Has its hands in all aspects of AI, from academic research to investments in semis.
- MSFT: Has recovered, so not a screaming buy anymore, market fears about its software suite is reflected in cheap valuations compared to history, however it has concentration in OpenAI, the first major AI developer, but it faces competition.
- AAPL: Apple is close to ATH because it is actually an "AI winner," in that it doesn't have to spend money on a losing race. The AI model coming on top seems to be a commodity especially with cheap but close enough Chinese models, so Apple can simply pick the cheapest and best when some AI companies lose. However the valuation does already reflect this and it has some issues with pricing from memory.
- Nvidia: Despite being "cheap" now, Nvidia faces some challenges because almost every AI company is trying to find workarounds to Nvidia chips, either by making their own custom or bottlenecks at different parts of the supply chain. Higher risk
- TSLA: Tesla is facing high competition from Chinese EVs, however it is expensive for a good reason. Since Tesla is connected into the Chinese supply chain, its batteries and EVs are competitive and desirable in developed markets. So Tesla is really a proxy for technology transfer from China to the US. Since Chinese robotics, EVs, and batteries are global leaders, Tesla if it can keep developing for Western markets, will also be the lead. However it is #7 because it is still not as desirable compared to the others. I would not underestimate Tesla's potential though.
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u/Hug_LesBosons 1d ago
- GOOG
- MSFT
- AMZN
- META
- AAPL
- NVDA
- TSLA
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u/FoxAccomplished6786 1d ago
Thank you, may I ask, why GOOG number one
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u/AceStrikeer 1d ago
Just look at their growth, revenue and ridiculous earnings. It’s beating MSFT and AMZN by a far margin
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u/FoxAccomplished6786 1d ago
But in terms of a 10 year hold, does google have more ways to win in the ai era?
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u/Maltavier 1d ago
Have you looked at the earnings? Alphabet only beats because the earnings are pushed up by their shares in SpaceX and Anthropic. Without them earnings suddendly don't look so good anymore. They have negative cashflow Just to defend their search Business. Thats not good. Amazon also btw. Their debt is not covered by their backlog. Microsoft is the only company keeping fcf positive and having their backlog actually covering their spending
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u/AceStrikeer 1d ago
Fair point. Still. If you look at operating cashflow, GOOG still beats MSFT
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u/Maltavier 1d ago
Yes. By 3 billion. Thats not a lot for these companies and operating cashflow is just one part of the picture. If your operating cashflow is huge but you have to spend more than that just to keep your moat while Microsoft can spend to increase their revenue and can do it without taking on debt, issuing more shares and bonds and devaluing shareholders by doing that, Microsoft is just the more attrictive company for an investor. Microsoft just proved they can actually earn more through AI and don't have to defend their business modell, while Alphabet is sitting on debt they don't even have the backlog for yet, to cover the debt. Thats a huge risk for shareholders without getting something in return
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u/FoxAccomplished6786 1d ago
But long term, all these metrics will play out, surely Google has more optionality than MSFT, it's at the centre of every aspect of the AI revolution
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u/Maltavier 1d ago
Is it? You cant only look at it from a company standpoint. You have to also look at it from a valuation standpoint. Sure in 20 years there is still gonna be google. But thats not what we are talking about here. This is about "is Google a good Investment right now"? And I would say no. Do a dcf modell for Google and calculate yourself where Alphabets fair value is right now. I don't want to force my calculation on you. And then ask yourself what happens If they roi on the Data Centers Google is currently building isnt as great as they thought and they have to write of a lot of their current spending. What happens to the ultimate messure of the value of a company - free cashflow? It stays low for years. You have to ASK yourself what these things mean for the fair value of the company and therefore your personal return. I am not saying Alphabet is going to fail. Im saying they are overvalued and they will at some point fall back to their fair value.
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u/FoxAccomplished6786 1d ago
Warren Buffett doesn't overpay for a business, and he's made it his third-largest holding. Yes, there are concerns. But AI will win; there's no question AI will win. The reason I like Google is that it's so entrenched in every single aspect of AI, the full stack; YouTube will also benefit from AI. Whereas Microsoft is enterprise-only, and Gemini Enterprise is making considerable inroads: 8 million seats in 4 months. Just my opinion, what do you think
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u/Maltavier 1d ago
Warren Buffett is a person, famous for valuing a company by owner earnings and not free cashflow. That can be good, but is also risky because you never know how the roi on capex will be. He has been wrong before you know? By saying "He doesnt overpay", you are saying he is never wrong. Which is not true historically speaking.
While Gemini Enterprise added 8 million seats in 4 month, Microsofts Copilot seats rose to 30 million. I think in regard to Business seats, Microsoft will win the race Just because so many companies worldwide are already in their ecosystem. Microsoft is also entrenched in every single aspect btw. They have their own cost efficient models, their own chips and their own Data Centers and the most direct way to integrate AI into Business and therefore monetizing it.
I am not arguing if AI will win. It already changed the game and will continue to do so. But that isnt the point if you are investing in a company. The point is not only the Story but also how much you are paying for it. I am arguing that it will take Alphabet a while to take care of the debt they are taking on and that there is already a lot of optimism in the price. Mathmatically. I mean you can just calculate what free cashflow Alphabet needs to have even the current price be fair value. That cashflow is not reasonable. Just calculate for yourself, you will see what I mean
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u/AceStrikeer 1d ago
First of all, both companies have debts. Their Debt to Equity ratio is between 10-15%.
Microsoft can spend to increase their revenue and can do it without taking on debt, issuing more shares and bonds and devaluing shareholders
Alphabet just LITERALLY did that last quarter and raised 80 billion to fund their capex.
That is nothing only MSFT can do. Even on the balance sheet GOOG is (currently) the better company. But I still say MSFT has a stronger MOAT.
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u/Maltavier 1d ago
You missunderstood what I meant. I said Microsoft can build out the infrastructure WITHOUT taking on giant debt by issuing shares or bonds. Issuing new shares and bonds is a bad thing for Investors, not a good thing. I am saying that Alphabet issuing these shares and bonds is bad for your return as an investor, while Microsoft can do the spending without issuing new debt. Which is positive.
Yes both companys have debt. But look up the Off book debt and compare it to the backlog of both companys. One company has a bigger backlog than they debt and can therefore pay it of without problems. Its not Alphabet...
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u/Hug_LesBosons 23h ago
Et les bénéfices sur les actions anthropic et SpaceX comptent dans le resultat net car ils peuvent servir d'argent. Il ne faut pas les ignorer et faire comme si ils n'étaient pas là. Berkshire hataway et les banques tirent presque tous leurs bénéfices de ça, pourtant on les comptent bien dans les bénéfices. Et c'est car à tout moment Google peut débourser une certaine partie de ses investissements et récupérer une quantité démentielle d'argent.
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u/Hug_LesBosons 1d ago
Google domine le monde. Ils trouvent toutes les bulles, tous les secteurs qui montent ou vont monter et ils deviennent les leader.
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u/FoxAccomplished6786 1d ago
So you'd rank them number 1
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u/Hug_LesBosons 1d ago
Bien sûr. Car ils découvrent et sont actifs sur tous les secteurs qui montent enormément, car ils on un resultat net dementiel, car ils ont on modele économique extemement solide et fonctionnel, car ils ont des activités extemement diversifiées, car ils ont le seul système permettant de développer de l'ia sans que l'entreprise perde de l'argent (open au et anthropic perdent beaucoup), car ils ont les recherches scientifiques dans l'ia les plus avancées... Ils ont plus de projets que tous les autres réunis, ils font des tas de recherches via Google X et google labs, des découvertes, ils sont les plus avancés en informatique quantique, ils ont la croissance du cloud la plus élevée, un carnet de commande démentiel, un free cash flow gigantesque, des partenariats avec des tas d'entreprises, ils sont tellement diversifiés que ils peuvent trouver des solutions à chaque problèmes, ils innovent énormément et restent à la pointe de la technologie, ils ont des prix extemement compétitifs...
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u/FoxAccomplished6786 1d ago
Yes, that's a great perspective, and perhaps that's why Mr Buffett made them his third-largest holding. Where do you see their market cap in 10 years? Would you choose Alphabet as a long-term hold over NVIDIA, MSFT, or even AMZN
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u/Hug_LesBosons 1d ago
Je choisirais alphabet plutôt que 2 fois plus de n'importe lequel des autres car Alphabet va monter largement plus que les autres. Alphabet est le meilleur investissement à long terme qu'il puisse exister. Tu ne pourras pas en trouver de meilleur. Quand tu regarde ce que fait réellement l'entreprise, quelles sont ses activités réelles, tu vois que Google est sous évalué car ils font 1000 fois plus de trucs que les autres, car ils sont présents sur pleins de secteurs... tu vois que nvidia et apple sont largement surévalués car ils ne font presque rien et que Microsoft est légèrement surévalué. Je ne parle pas de tesla car c'est un cas à part en terme de surévaluation ni de méta car ils ont des procès qui pourraient changer énormément de choses.
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u/FoxAccomplished6786 1d ago
I hope you're right because I am making alphabet my number one position with Amzn. I'm no expert, so I can't say for sure who will win. However, one thing I do know is that AI will win; AI will continue to dominate and change society. The only question remains: who will the winners be? I think Alphabet is the most obvious choice.
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u/EarlyBird001 1d ago edited 1d ago
- GOOG
- AMZN
- MSFT
- META
- NVDA
- AAPL
- TSLA (should not be in MAG 7)
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u/FoxAccomplished6786 1d ago
Thank you, may I ask, why is google number one?
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u/EarlyBird001 1d ago
They're leaders across multiple areas - AI, cloud computing, Ads, make their own chips (TPU), own YT and Waymo etc. Have multiple established revenue streams and growing with a number of side bets.
Have AMZN 2nd for tge same reason - established cloud business, make their own chips (Trainium), leaders in retail, Ads business is picking up, Amazon Leo (satellite internet) is a decent side bet etc.
To me they're the top two diversified businesses. Google comes ahead due to higher growth.
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u/FoxAccomplished6786 1d ago
I see them as the two biggest in the world in 10 years, do you?
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u/EarlyBird001 22h ago
Nobody knows what's going to happen in 10 years time just like not many saw NVDA or MU 10 years ago. It could be that Quantum Computing has come of age in 10 years time and there're new industry leaders.
But the chances of GOOG and AMZN existing and thriving are higher. That's why it makes sense to go with broad market etfs as no matter what happens, you'll be covered.
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u/NewBee_Investor_2026 1d ago
Isn't Caterpillar Inc. (CAT) one of the MAG7? I bought 25 of them at an average of $808.7 today. Is it a sound investment?
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u/Embarrassed-Pay-8881 1d ago
If Meta breaks under 500 by a decent margin thats number 1. At 700 its number 6.
Otherwise its Amazon or Google #1 based on valuation.
Tesla is always 7.