This Dirt Cheap Magnificent Seven Stock May Be a Once-in-a-Decade Buying Opportunity Right Now.

The Magnificent Seven tech stocks led the S&P 500 to enormous gains over the past few years as investors rushed into the latest growth opportunity: artificial intelligence (AI). Each of these players is involved in the technology at a certain level, offering investors exposure to this new growth opportunity. At the same time, these companies also offer investors some safety -- they are all well-established, profitable tech giants.

These stocks have each delivered double- or triple-digit gains over the past three years, which at certain times brought valuations to high levels. After a recent market pullback and as earnings continue to climb, however, the Magnificent Seven players are no longer looking very expensive. In fact, one -- the cheapest of the bunch -- actually is dirt cheap. And it may represent a once-in-a-decade buying opportunity right now. Let's check it out.

Image source: Getty Images.

A company you may know well

The company I'm talking about is one you might come in contact with daily if you're a user of Facebook, Instagram, or WhatsApp. It's Meta Platforms (NASDAQ: META), owner of these popular social media apps. More than 3.5 billion people globally use these apps on a daily basis -- and this is important because advertising across the platform makes up most of Meta's revenue. So, the more people use these apps regularly, the more advertisers will rush there to contact them, the target audience.

All of this has built a long track record of earnings growth for Meta. The company has been so successful that it even launched a dividend in 2024 -- so it can afford to reward shareholders and invest in growth. That's fantastic, as it's a combination that may please both cautious and bold investors.

So, where does Meta fit into the AI story? The company has been heavily investing in AI over the past several years, with the idea of applying AI to its social media apps and the advertising process, as well as potentially developing other products and services down the road. Meta has built out data centers, developed, trained, and is using its own large language models, and the company even launched a superintelligence lab last year.

Meta already has applied its AI tools to its social media apps, adding a virtual assistant and special features, for example. And it's using AI in the advertising process to make ads better and more successful. All of this should please advertisers and boost advertising revenue over time.

Meta's new revenue growth stream

On top of this, Meta just announced it will roll out subscription plans for consumers -- this will allow users of its apps to access special features. At the same time, it will test new subscription offerings for businesses and AI plans that, for example, give Meta AI users more compute power for queries, according to TechCrunch.

This is exciting because it opens up a whole new revenue stream for Meta, and one that could grow as the company adds new features and designs plans for specific audiences and their priorities.

Now, let's look at Meta's valuation. As I mentioned, it's the cheapest of the Magnificent Seven, as it's been for a while, but not only that -- it's also trading at a dirt cheap level, at 19x forward earnings estimates, considering the company's earnings track record and potential growth in the AI market.

AAPL PE Ratio (Forward) data by YCharts

Why has Meta been trading at a discount? The company has invested heavily in AI, but unlike chip players such as Nvidia or cloud computing giants like Amazon, it hasn't immediately monetized its investments. While they've been offering products and services to customers since the early days of the AI boom, Meta had to first develop its AI strengths and then apply them to its own products -- so Meta's path to AI revenue growth has been longer, and that's perfectly normal considering its business.

Now, though, as Meta begins to launch more and more of its AI into its products, could represent a key turning point. That's why Meta stock might be offering you a once-in-a-decade investment opportunity right now.

Adria Cimino has positions in Amazon and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.