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Welcome to Episode #457 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
She has talked about the Magnificent 7 stocks (aka, the “Mag 7” stocks) many times over the years. While they are considered growth stocks, occasionally, there are some which look like values.
There have been buying opportunities for value investors in the past.
In March 2024, Tracey encouraged Warren Buffett and Berkshire Hathaway to buy Alphabet given its free cash flow and low valuation with a forward P/E of just 17. Alas, he didn’t listen to her until 2025, but better late than never.
Should value investors be looking at any of the Mag 7 stocks right now?
Who is cheap and who is not?
The Cheapest and the Most Expensive Mag 7 Stocks Right Now
Tesla is not the cheapest of the Mag 7 stocks. It’s the most expensive, on a price-to-earnings (P/E) basis. It trades with a forward P/E of 215 but was at 225 at the time of the recording of the podcast.
Shares of Tesla have fallen further in the last few trading sessions. It’s now down 22% year-to-date, which makes it the worst performing Mag 7 stock this year.
Earnings are expected to rise just 1.2% this year but rebound another 33.9% in 2027.
Tesla is now a Zacks Rank #4 (Sell) stock ahead of its earnings report on Oct 21, 2026.
Should both value and growth investors stay away from Tesla with these valuations?
Apple is still the largest equity position in Berkshire Hathaway’s portfolio. But Berkshire Hathaway bought Apple a decade ago when its P/E was under 10. Apple now trades with a forward P/E of 36. That is a historically high valuation.
Earnings are expected to rise 18.8% this year but only 7.7% in 2027.
Apple also trades with a price-to-sales (P/S) ratio of 10.7. A P/S ratio over 10 is a high valuation, even for a growth stock. Apple is an expensive stock.
Shares of Apple are up 26% year-to-date to new all-time highs. It’s the best performing stock in the Mag 7 this year.
Is it risky for value investors to buy Apple right now?
Shares of Amazon are up only 8% year-to-date. That is underperforming the S&P 500 which is up 11.8%.
Earnings are expected to rise 81.6% in 2026 and another 18.7% in 2027. With that kind of earnings growth, but with the shares not going anywhere, it shouldn’t be a surprise that Amazon has a forward P/E of just 19.6. This is historically the lowest Amazon has traded at on a P/E basis.
But it’s not just earnings which are cheap. Amazon has a price-to-sales (P/S) ratio of 3.6. While that’s not a “value” as a P/S ratio under 1.0 is a true value, it’s the lowest of the Mag 7 stocks. Investors are paying just $3.60 for every $1.00 worth of sales.
Taken in its entirety, Amazon is the cheapest of the Mag 7 stocks right now.
Is Amazon a deal?
What Else Should You Know About the Mag 7 Stocks and Finding Deals?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of AMZN, GOOGL, and MSFT in her personal portfolio.]
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Image: Bigstock
This is the Cheapest Mag 7 Stock Right Now
Key Takeaways
Welcome to Episode #457 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
She has talked about the Magnificent 7 stocks (aka, the “Mag 7” stocks) many times over the years. While they are considered growth stocks, occasionally, there are some which look like values.
There have been buying opportunities for value investors in the past.
In March 2024, Tracey encouraged Warren Buffett and Berkshire Hathaway to buy Alphabet given its free cash flow and low valuation with a forward P/E of just 17. Alas, he didn’t listen to her until 2025, but better late than never.
Should value investors be looking at any of the Mag 7 stocks right now?
Who is cheap and who is not?
The Cheapest and the Most Expensive Mag 7 Stocks Right Now
1. Tesla, Inc. (TSLA - Free Report)
Tesla is not the cheapest of the Mag 7 stocks. It’s the most expensive, on a price-to-earnings (P/E) basis. It trades with a forward P/E of 215 but was at 225 at the time of the recording of the podcast.
Shares of Tesla have fallen further in the last few trading sessions. It’s now down 22% year-to-date, which makes it the worst performing Mag 7 stock this year.
Earnings are expected to rise just 1.2% this year but rebound another 33.9% in 2027.
Tesla is now a Zacks Rank #4 (Sell) stock ahead of its earnings report on Oct 21, 2026.
Should both value and growth investors stay away from Tesla with these valuations?
2. Apple Inc. (AAPL - Free Report)
Apple is still the largest equity position in Berkshire Hathaway’s portfolio. But Berkshire Hathaway bought Apple a decade ago when its P/E was under 10. Apple now trades with a forward P/E of 36. That is a historically high valuation.
Earnings are expected to rise 18.8% this year but only 7.7% in 2027.
Apple also trades with a price-to-sales (P/S) ratio of 10.7. A P/S ratio over 10 is a high valuation, even for a growth stock. Apple is an expensive stock.
Shares of Apple are up 26% year-to-date to new all-time highs. It’s the best performing stock in the Mag 7 this year.
Is it risky for value investors to buy Apple right now?
3. Amazon.com, Inc. (AMZN - Free Report)
Shares of Amazon are up only 8% year-to-date. That is underperforming the S&P 500 which is up 11.8%.
Earnings are expected to rise 81.6% in 2026 and another 18.7% in 2027. With that kind of earnings growth, but with the shares not going anywhere, it shouldn’t be a surprise that Amazon has a forward P/E of just 19.6. This is historically the lowest Amazon has traded at on a P/E basis.
But it’s not just earnings which are cheap. Amazon has a price-to-sales (P/S) ratio of 3.6. While that’s not a “value” as a P/S ratio under 1.0 is a true value, it’s the lowest of the Mag 7 stocks. Investors are paying just $3.60 for every $1.00 worth of sales.
Taken in its entirety, Amazon is the cheapest of the Mag 7 stocks right now.
Is Amazon a deal?
What Else Should You Know About the Mag 7 Stocks and Finding Deals?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of AMZN, GOOGL, and MSFT in her personal portfolio.]