The Magnificent 7 stocks haven’t had it easy lately, but investors shouldn’t toss in the towel on them after a volatile August for markets.
Be precise with the picks right now given more challenging market conditions, said Wind Shift Capital founder Bill Blain.
Blain — the long-time author of the Morning Porridge newsletter — tagged Meta (META) as the best Mag 7 play today.
“The business of advertising is massive,” Blain told Yahoo Finance executive Brian Sozzi on his Opening Bid podcast (see video above or listen in here). “About 75% of advertising goes through the Internet, and the firm that controls that best at the moment is [Meta].”
Meta’s second quarter earnings last week underscore Blain’s bullish call.
Earnings and revenue easily beat analysts’ estimates. Profits were up 73% from a year ago.
Its app family (Instagram, Facebook, Whatsapp) also walloped expectations with revenues of $38.72 billion. Sales for the app family rose about $7 billion year over year.
Meta shares have rallied 7.5% since the company’s Aug. 1 earnings report, according to Yahoo Finance data. Shares are still off by 4% in the past month as sentiment has soured on the Mag 7.
The Magnificent 7 includes Apple (AAPL), Tesla (TSLA), Alphabet (GOOG, GOOGL), Amazon (AMZN), Microsoft (MSFT), Nvidia (NVDA), and Meta.
Unlike Meta, the other six names have dealt with various negative news in recent weeks that have pressured the shares.
Nvidia is reportedly delaying the shipment of its new Blackwell AI chips by a quarter. Tesla had a terrible second quarter. Alphabet preached of needing more time for AI adoption, while market leader Microsoft’s AI results didn’t live up to expectations. Amazon warned of a slowing consumer in its second quarter.
All of the non-Meta Mag 7 stocks are down since Meta’s earnings report, led by a 13% drop on Tesla.
Then there is Apple.
Blain, who had been bullish on Apple, has recently shifted perspective.
“When Warren Buffett turned around and dumped the stock, I thought, he must know something I don’t,” said Blain.
Warren Buffett’s Berkshire Hathaway (BRK-A) (BRK-B) reportedly slashed its stake in the tech giant by as much as 50%. It’s unclear as to Buffett’s motivation, but it sent a negative signal to an increasingly jittery market.
Three times each week, Yahoo Finance Executive Editor Brian Sozzi fields insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
In the below Opening Bid episode, Morgan Stanley Chief US Equity Strategist & CIO Mike Wilson reveals why tech stocks are still looking overvalued.
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