This "Magnificent Seven" Stock Looks Dirt Cheap for January 2026

Most investors understand that buying above-average growth stocks usually means paying above-average prices for them. This is particularly true of the must-have names that make up the so-called "Magnificent Seven." Numbers from Yardeni Research indicate these seven technology stocks are currently collectively valued at nearly 28 times their forward-looking per-share profits, versus an average forward-looking price-to-earnings ratio of just over 20 for every other name in the S&P 500.

Not all seven of these massive artificial intelligence (AI)-driven tickers are overvalued at this time, however. One of them is markedly cheaper than the rest, in fact, particularly in light of this year's projected profits. That's Facebook parent Meta Platforms (NASDAQ: META). Here's what you'll want to know.

Image source: Getty Images.

More AI spending in the cards

It's not too tough to understand why Meta stock is down so much since the middle of last year, dragging this stock's valuation lower with it. Shares plunged in October, mostly in response to the company's plans to continue making major investments in artificial intelligence.

Granted, when an analyst asked a question during the company's third-quarter earnings call, CEO Mark Zuckerberg didn't exactly word his answer in the most bullish way. As part of some perspective on future capital expenditures, Zuckerberg explained, "My view on this is that rather than continuing to be constrained on capex, and feeling in the core business like we have significant investments that we could make that we're not able to make that would be profitable, the right thing to do is to try to accelerate this."

Investors interpreted this honest but alarmingly uncertain stance in the worst possible light. Big mistake.

A great price for this sort of growth potential

Meta is almost certainly going to be spending more on AI in the near future than most anyone anticipated.

It's not likely to be nearly the problem that the trading crowd's feeling like it could be, though. Now more than three months after Zuckerberg's eye-popping take on AI investments, the analyst community still believes the company's per-share profits are set to improve from 2025's $25.24 to $28.70 in 2026 en route to $33.11 for 2027. That puts Meta's forward-looking price-to-earnings ratio at just under 22, which is still somewhat expensive compared to most stocks, but dirt cheap for an organization that's expected to grow its top line to the tune of 18% this year and improve its bottom line by almost as much. That's also the lowest forward-looking P/E among all the Magnificent Seven stocks at this time.

And it's worth adding that the vast majority of analysts currently rate Meta a strong buy, with a consensus price target of $836.08 that's 35% above the stock's present price.

Perhaps more important to interested investors, thinking more critically about what Mark Zuckerberg was actually trying to explain in October, he may have simply been pointing out that all of Meta's recent investments in AI capacity have been paying off -- and continue to do so -- even if they don't pay off exactly in the manner or time frame that's expected. The bigger risk here remains not investing enough and then not being able to capitalize on opportunities quickly when they inevitably surface.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.