From Nasdaq:

Jan. 23 was a great day for the stock market and the S&P 500 and Dow Jones Industrial Average closed at record highs. Three of the “Magnificent Seven” stocks–Microsoft, Nvidia, and Meta Platforms–also ended the day with all-time highs. Microsoft and Nvidia have set records multiple times this year, while Meta Platforms quadrupled since November 2022. Meta has the second-lowest price-to-free cash flow ratio of the Magnificent Seven.

Nvidia has had blistering growth and passed $1 trillion in market cap last June. Now it’s close to $1.5 trillion, putting it on track to pass Amazon and Alphabet as the world’s third-most valuable company. The biggest risk of investing in Nvidia is that much of its future growth is priced into its current valuation. Nvidia’s revenue is up 66.4% and net income has quadrupled.

Microsoft has the best components of Meta Platforms and Nvidia. Like Meta, Microsoft is a cash cow with a proven business model and like Nvidia, it’s investing heavily in AI and already profiting from it. Microsoft’s AI tools are user-friendly and integrated into existing applications. Microsoft has the best risk/potential reward profile of any of the Magnificent Seven stocks.

If you are considering investing in Meta Platforms, The Motley Fool Stock Advisor analyst team has identified what they believe are the 10 best stocks for investors to buy right now. Although Meta Platforms was not one of them, the service provides a blueprint for success and regular updates from analysts, including guidance on building a portfolio and two new stock picks each month.

Regardless, investors should note that the views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.



Read more: These 3 “Magnificent Seven” Stocks Hit All-Time Highs on the Same Day. Here’s the Better Buy in 2024.