Investing in the Magnificent Seven: A Closer Look at Amazon, Alphabet, and Meta

The "Magnificent Seven" stocks, comprising Amazon, Alphabet, and Meta, have been the talk of the town in the tech industry, with their impressive growth and dominance in the market. As investors, it's essential to understand the key growth and valuation metrics of these companies to make informed decisions. Let's dive into the details of these three tech giants.



1. Amazon (AMZN)
* Revenue Growth: Amazon's revenue growth has been impressive, with a 15% increase in Q3 2024 year-over-year (source: YCharts).
* EPS Growth: Amazon's EPS has also seen significant growth, with a 52% increase in Q3 2024 (source: YCharts).
* Forward Earnings Yield: Amazon's forward earnings yield is 41.9%, which is relatively high compared to other Magnificent Seven stocks (source: YCharts).
* FCF Yield: Amazon's FCF yield is 3.7%, which is lower than some of its peers (source: Man Numeric).
* P/E Ratio: Amazon's P/E ratio is 41.9, which is higher than the broader market and other Magnificent Seven stocks (source: YCharts).
2. Alphabet (GOOGL)
* Revenue Growth: Alphabet's revenue growth has been steady, with a 15% increase in Q3 2024 year-over-year (source: YCharts).
* EPS Growth: Alphabet's EPS has seen significant growth, with a 37% increase in Q3 2024 (source: YCharts).
* Forward Earnings Yield: Alphabet's forward earnings yield is 22.3, which is lower than Amazon but still relatively high (source: YCharts).
* FCF Yield: Alphabet's FCF yield is 4.0%, which is higher than Amazon but lower than some of its peers (source: Man Numeric).
* P/E Ratio: Alphabet's P/E ratio is 22.3, which is lower than Amazon and the broader market (source: YCharts).
3. Meta (META)
* Revenue Growth: Meta's revenue growth has been strong, with a 19% increase in Q3 2024 year-over-year (source: YCharts).
* EPS Growth: Meta's EPS has seen significant growth, with a 37% increase in Q3 2024 (source: YCharts).
* Forward Earnings Yield: Meta's forward earnings yield is 25.7, which is lower than Amazon but still relatively high (source: YCharts).
* FCF Yield: Meta's FCF yield is 3.2%, which is higher than Amazon but lower than some of its peers (source: Man Numeric).
* P/E Ratio: Meta's P/E ratio is 25.7, which is lower than Amazon but still higher than the broader market (source: YCharts).

In conclusion, Amazon, Alphabet, and Meta have shown impressive growth in revenue and EPS, but their valuations vary significantly. While Amazon has a higher forward earnings yield and P/E ratio, Alphabet and Meta offer more attractive valuations with lower P/E ratios and higher FCF yields. As investors, it's crucial to consider these metrics when evaluating the Magnificent Seven stocks and make informed decisions based on their growth prospects and valuations.