Yahoo Finance Magnificent 7 Discounts: Buy These 3 Stocks (META, AAPL, NVDA)
Action over the last three months in the stock market has been marked by a notable shift in leaders from Tech and AI to more defensive sectors like Utilities, Healthcare, Real Estate and Bonds. In the chart below we can see that since June, the Real Estate ETF XLRE, Treasury ETF TLT, Utilities ETF XLU and Healthcare XLV have outperformed both SPY and QQQ by a fairly significant margin.
As the Federal Reserve signals the start of a rate-cutting regime and broad economic indicators (employment, growth, inflation) point to a slowdown (not a recession), it's not surprising that some investors have shifted to more conservative holdings.
However, now that tech stocks have been out of favor for nearly three months, many of the leading names, such as the Magnificent Seven stocks have traded to quite attractive levels. In this article, I’ll highlight my top three picks moving forward—Apple (AAPL), Meta Platforms (META), and Nvidia (NVDA)—along with key tactical trading levels to watch.
Image Source: TradingView
Apple: New iPhone and AI Innovations
On Monday, Apple unveiled a new lineup of products, including the iPhone 16 and iPhone 16 Pro, Apple Watch Series 10, and AirPods 4. Key features of the iPhone 16 series include enhanced camera capabilities, improved battery life, a new Action button for quick shortcuts and its new AI system called Apple Intelligence.
The Apple Watch Series 10 boasts upgraded health tracking features and a redesigned case. AirPods 4 offer improved audio quality, active noise cancellation, and enhanced hearing health features.
Apple has expanded its foray into health monitoring, with the AirPods now administering hearing tests and functioning as a 'clinical-grade' hearing aid. Additionally, the Apple Watch will now be able to monitor for sleep apnea by tracking breathing disturbances.
Although critics often note the seemingly incremental improvements to these new Apple products, I find the health-monitoring functionalities especially compelling, while the new AI features could significantly improve usability.
Apple stock has notably outperformed all of the Magnificent Seven stocks since May of this year, which is especially impressive considering the high volatility the market has experienced over the last three months.
Image Source: TradingView
Along with the relative strength of Apple stock, a more granular look at the price action shows a potential bull flag forming. If the broad market can hold up and AAPL breaks out above the $220 level, it should make an attempt at new all-time highs.
Furthermore, the material integration of AI into the iPhone, the most widely used mobile device in the world sets up Apple to possibly ascend to AI leadership. At the least, if the AI narrative picks up again, Apple should be at the forefront.
Image Source: TradingView
Meta Platforms: A Well Rounded and Promising Stock Pick
Although Meta Platforms seems to semi-regularly get caught up in frenzied controversy such as political scandals and misguided investments (Metaverse) the business continues to grow like crazy and spew profits. These manic cycles, although sometimes exhausting, have created numerous opportunities for savvy investors to pick up shares at a discount.
Sales are expected to grow 19.8% this year and 13.9% next year, while earnings are projected to jump 43.6% this year and 12.7% next year. Analysts forecast earnings per share (EPS) to grow 19% annually over the next three to five years. Additionally, the stock is trading at a one year forward earnings multiple of 23.6x, which is inline with the market average and below its 10-year median valuation of 25x.
Image Source: Zacks Investment Research
Meta Platforms isn’t currently mixed up in any scandals and has rather been the second-best performing stock in the Magnificent Seven since the start of 2023, bested only by Nvidia. But even with this incredible stock price appreciation, META remains among the cheapest of the group when comparing relative valuations thanks to equally impressive growth in EPS.
Image Source: TradingView
The price action in Meta Platforms’ stock also paints a bullish picture. In addition to relative strength, META is building out a bull flag, nest within a broader consolidation. If the stock can break out above the $515 level, it should move into the upper range and beyond. Alternatively, if the stock loses the lower bound support of ~$465, the broader market is likely selling off, and it may be prudent to wait for another opportunity.
Image Source: TradingView
Nvidia: Cheapest Relative Valuation in Years
Nvidia, the most exciting stock in the market over the last two years, has been struggling over the last three months. Between mid-June and early-August Nvidia staged a nasty correction, falling 35%. After rallying aggressively from the lows and testing the upper bound of the range, the shares have again sold off.
Hovering now just above $100, I think investors have an opportunity to buy the stock near the bottom of the range. And not only has the stock come down to more reasonable levels, so has the Semiconductor manufacturer’s valuation.
Image Source: TradingView
Today, Nvidia is trading at a one year forward earnings multiple of 38x, which is below its 10-year media of 42.8x and close to the lowest it has been in the last five years. With EPS forecast to grow 41.7% annually over the next three to five years, Nvidia has a PEG ratio of 0.9, which is a discount based on the metric.
If we look a little further into the future, Nvidia is trading at just 28x FY26 earnings. If growth remains as high as projected, Nvidia stock should continue to appreciate strongly.
Should Investors Buy Nvidia, Meta Platforms and Apple Stock?
Given the current market conditions, a shift towards defensive sectors has created attractive buying opportunities among the tech leaders, particularly the Magnificent Seven. Stocks like Apple (AAPL), Meta Platforms (META), and Nvidia (NVDA) have all experienced pullbacks in recent months, presenting investors with entry points at more reasonable valuations.
Apple, with its latest product releases and AI innovations, continues to show resilience and leadership, while Meta Platforms, despite past controversies, is experiencing tremendous growth and remains undervalued compared to its peers. Nvidia, despite its recent correction, offers high growth potential and is trading at its most attractive valuation in years.
For long-term investors, these stocks offer a blend of stability, innovation, and growth. Apple’s steady outperformance, Meta’s explosive earnings growth, and Nvidia’s dominance in AI and semiconductor technology make these three companies well-positioned for the next market uptrend. With their recent pullbacks, now may be the time to capitalize on their future potential before the market shifts back in favor of tech.
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Apple Inc. (AAPL) : Free Stock Analysis Report
iShares 20+ Year Treasury Bond ETF (TLT): ETF Research Reports
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
Utilities Select Sector SPDR ETF (XLU): ETF Research Reports
Real Estate Select Sector SPDR ETF (XLRE): ETF Research Reports
Meta Platforms, Inc. (META) : Free Stock Analysis Report
