Zach's Market Edge Podcast: The Magnificent 7 for 2025

Host: Tracy Rck

Overview

• Discussion on the Magnificent 7 stocks
  • Apple, Amazon, Alphabet, Meta, Tesla, Nvidia, Microsoft
  • Common inclusion in S&P 500
  • Potential for individual stock investment for 2025

Key Topics

Valuations

• Stocks sometimes perceived as expensive
• Price to Sales Ratio (PSR) analysis for value:
  • PSR ≤ 1: Considered value (pay less per dollar of sales)
  • PSR > 10: Considered expensive

Magnificent 7 Stocks PSR Overview

• Amazon (AMZN): 3.9 (Lowest PSR)
• Alphabet (GOOGL): 6.8 (Attractive)
• Apple (AAPL): 9.6 (High for slower growth)
• Meta (META): 10
• Microsoft (MSFT): 13.1 (Personal portfolio holding)
• Tesla (TSLA): 14.4
• Nvidia (NVDA): 29 (High, growth trajectory still attractive)

Top Picks for 2025

1. Alphabet (GOOGL)

• Performance: YTD up 41%
• Valuation:
  • PSR: 6.8
  • PE: 23.7
  • Price to Book: 7.4
  • PEG: 1.3
• Growth Areas:
  • YouTube as a major revenue driver ($50 billion over last 4 quarters)
• Dividend: 0.4% yield
• Future Growth: Double-digit earnings growth expected for 2025 & 2026

2. Meta Platforms (META)

• Performance: YTD up 76%
• Valuation:
  • PSR: 10
  • PE: 27.4
  • PEG: 1.4
  • Price to Book: 9.5
• Growth Areas:
  • Strong advertising revenue
  • Expansion in AI and Threads
• Dividend: 0.3% yield
• Future Growth: Upward earnings and revenue growth

3. Amazon (AMZN)

• Performance: YTD up 53%
• Valuation:
  • PSR: 3.9
  • PE: 43.8
  • PEG: 1.5
  • Price to Book: 9.2
• Growth Areas:
  • Expansion in AI and data centers
  • Significant advertising revenue
• Future Growth: Double-digit earnings and revenue growth expected

Other Insights

• Nvidia (NVDA): Strong growth in AI, potential buy on pullback
• ETF Option: MAGS for owning all Magnificent 7 stocks

Market Outlook

• Possible new administration affecting market dynamics in 2025
• Fed may pause rate cuts
• Ongoing AI growth opportunities
• Look for stock pullbacks as entry points

Podcast Availability

• Platforms: YouTube, Apple, Spotify, Amazon Music

Final Remarks

• Wishing listeners happy holidays and a prosperous 2025