The 3 Priciest Magnificent Seven Stocks: Worth the Splurge? | Markets

Last year, every major index plunged into bear market territory. While they eventually reversed course, the S&P 500’s gains were driven by just a handful of stocks. The so-called Magnificent 7 sticks are a group of mega-cap tech stocks identified by Bank of America (NYSE:BAC) Chief Investment Strategist Michael Hartnett as providing all the lift the stock index enjoyed. Without their gains, the S&P 500’s performance would have been essentially flat.

Specifically, the Magnificent Seven stocks are Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA). The broad market index is weighted by market capitalization. These seven stocks have a combined weighting of 28% in the S&P 500. It means their performance applies outsized influence on the index — for good or bad.

The index pulled back once again since peaking at the end of July. However, most of that is due to Tesla tumbling 17% over the past three months. It’s only slightly offset by Amazon’s 7% gain. And that only came in the past week or so after it reported earnings. Before that, the seven stocks were down a collective 12.5%.

Of course, all the stocks are still sitting on enormous gains for the year, but the companies all still have rich valuations. Most sit well above the S&P 500’s 24.2 price-to-equity (PE) ratio. The following three stocks carry the highest PE ratio. Should you buy them? Let’s dig in and find out!

Tesla (TSLA)

Source: Zigres /

Despite being the one Magnificent Seven stock to lose the most value, electric car maker Tesla still carries a lofty valuation. Its PE ratio is 68 — almost three times greater than the S&P 500.

Tesla’s downfall began after its second-quarter earnings report. It said gross margins fell…

read more

FTC: We use income earning affiliate links. More on Sposored links.
Terms of use and third-party services. More here.

“The adventure of life is to learn. The purpose of life is to grow. The nature of life is to change. The challenge of life is to overcome. The essence of life is to care. The opportunity of like is to serve. The secret of life is to dare. The spice of life is to befriend. The beauty of life is to give.” —William Arthur Ward

Related Posts