The 'Magnificent Seven' stocks have been some of the most successful companies to invest in over the past decade or two.
The likes of Apple, Amazon, Microsoft, Alphabet, Meta Platforms, NVIDIA, and Tesla have delivered some life-changing returns to long-term investors in particular, not to mention the global dominance that all seven of these companies have built for themselves.
To illustrate from an investing standpoint, someone who bought Tesla shares in 2010 would be sitting on a 22,162% return right now. Over just the past five years, Nvidia shares have delivered a massive 1,470% return.
The other members of this exclusive club haven't been quite as lucrative as these standouts in recent times. Even so, each of these companies has been a market-beating investment, and comfortably so, over any long-term period.
The global volatility that has gripped global stock markets in recent weeks has not left these Magnificent Seven companies unscathed, though. Several have endured severe corrections. Nvidia, for example, is now down by over 25% from its most recent peak.
So today, let's check out how the valuations of the Magnificent Seven stand and which is currently the cheapest on a simple price-to-earnings (P/E) ratio basis.
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Which is the cheapest 'Magnificent Seven' stock today?
Here are all of the Magnificent Seven tech stocks, their last share prices (in US dollars) and their current (at the time of writing) earnings-multiple valuation:
| Magnificent Seven Stock | Share price | P/E Ratio |
| Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) | $163.85/$161.96 | 18.56/18.35 |
| Meta Platforms Inc (NASDAQ: META) | $547.27 | 22.68 |
| Microsoft Corporation (NASDAQ: MSFT) | $391.85 | 31.56 |
| Apple Inc (NASDAQ: AAPL) | $209.28 | 33.27 |
| Amazon.com Inc (NASDAQ: AMZN) | $188.99 | 34.20 |
| NVIDIA Corp (NASDAQ: NVDA) | $111.01 | 37.78 |
| Tesla Inc (NASDAQ: TSLA) | $284.95 | 156.84 |
As you can see, the cheapest member of the Magnificent Seven at present is Google-owner Alphabet. Alphabet's Class C and A shares currently trade on earnings multiples of 18.56 and 18.35, respectively. That makes Google shares almost half as cheap as those of Nvidia right now, judging by how many dollars investors are willing to pay for $1 of earnings.
At the other end of the scale, Tesla is by far the priciest of the 'Mag Seven', with investors currently asking $156.84 for every $1 of earnings.
P/E ratios can be deceptive…
Bear in mind, though, P/E ratios can be deceptive if a company is growing at a rapid clip. It wasn't that long ago that Nvidia shares, for example, were on an earnings multiple of over 80. But the company's fast-paced growth has quickly whittled that ratio down to where it is today, helped, of course, by that 25% drop.
It's also worth pointing out that these P/E ratios can change overnight when the company reports its latest earnings. We heard from Alphabet just last week, which saw the company post revenue growth of 15% and a whopping 48.68% rise in earnings per share (EPS). Thanks to this huge increase, Alphabet's P/E ratio is significantly lower today than it was before these earnings came out on 24 April.
Other members of the Magnificent Seven are scheduled to report their quarterly earnings soon, so keep an eye on those and see how they impact the company's valuation.
