Valuation showdown among the seven tech giants: Who is the current buy the dip opportunity?

Seven AI Concept Leader Stocks, why is only this one cheap?

The Magnificent Seven (科技七雄) has become a bellwether for U.S. stocks since it was defined last year, including the seven giants: Nvidia, Apple, Microsoft, Google, Amazon, Meta, and Tesla. However, this year the AI wave has pushed up their valuations, with most at a forward PE level of 25-30 times — which is not a historical low.

Interestingly, if we look at the forward price-to-earnings ratio, Meta has become the cheapest among the seven giants. Although Nvidia has the largest market capitalization, its valuation is not the highest; Tesla, on the other hand, is absurdly at 180 times PE (the data is skewed).

Is Meta's sell-off panic or opportunity?

Meta has recently been heavily sold off, mainly because it has started to borrow money for AI infrastructure construction. Previously, it spent what it earned, but now it is directly leveraging to invest in AI computing power—this has shocked the market.

But looking at the Q3 financial report, Meta's business is actually very strong.

• Revenue increased by 26% year-on-year, all thanks to AI-driven advertising optimization.
• This growth momentum may justify its frenzied AI spending.

The problem is that the market is still worried about history repeating itself—when Meta burned hundreds of billions of dollars on the “metaverse,” nothing came of it. Now, with another AI gamble, whether it can succeed is in question.

The opportunity for long-term holders is here

To be honest, Meta has one advantage: it has proven that it can cut losses. After the metaverse investments were slashed, it became a cash cow again. If AI doesn't deliver a big breakthrough in the end, it will most likely also optimize its spending strategy.

But this process may take 3-5 years. If you can hold through the fluctuations of Meta and are not scared off by short-term declines, this stock has the potential to outperform the market in the long run. On the other hand, if you can't stand the ups and downs, companies like Nvidia that have already profited from the AI boom may be more comfortable.

Core Judgment: Meta's cheap valuation + strong revenue growth indeed constitutes a buying point that has been misjudged—provided that your investment horizon is long enough.