Latest news with #MagnificentSeven
Yahoo
11 hours ago
- Business
- Yahoo
Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More
Seth Klarman is a staunch proponent of value investing, but he remains flexible in that approach. The Magnificent Seven stocks are expensive as a group, with most of them trading at a P/E above 30. This stock has been held down by multiple challenges, but the price is too attractive to pass up. 10 stocks we like better than Alphabet › Seth Klarman is a well-respected value investor with a global following. And there's good reason for that. His Baupost Group hedge fund returned an average of 20% per year over the first 30 years of its existence. That performance comes despite value stocks falling well out of favor over the last decade. But Klarman and his team emphasize that they "remain flexible in their application" of value investing. That means investing in stocks that are mispriced relative to their value, even if they won't show up on any stock screeners for deep value based on traditional metrics. As a result, this method can end up with some stocks that many investors would consider growth stocks, such as those found in the Magnificent Seven. But Klarman only sees one member of the vaunted group of trillion-dollar stocks as worth his and his investors' money, and he just added more of it to Baupost's portfolio. The Magnificent Seven is a group of stocks full of interesting opportunities for the right investor. And anyone who invested in any or all of them is probably happy with their returns over the last couple of years. But a few may not present the value necessary for an investment from someone like Klarman. As a group, they're relatively expensive based on traditional valuation standards. Four of the seven sport forward P/E ratios above 30, including Tesla (NASDAQ: TSLA) with its 168 times multiple. While Tesla could prove worth the price with its plans for a robotaxi service and humanoid robots, there's a lot of risk in buying the stock at its current price, especially as its core car business is facing stiff competition abroad. The other high-priced members are growing quickly and on relatively solid footing, but it's hard to argue they're a bargain at their current prices. But one member of the group trades for a valuation below the S&P 500's average, and that's kind of surprising for a stock with such strong growth potential. The stock has consistently traded at or near the lowest valuation of the Magnificent Seven, giving investors plenty of opportunities. That's why Klarman and his team have built up a position in Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), including adding 652,000 more shares in the first quarter, increasing its stake in the company by 46%. There are good reasons for Alphabet to trade at a lower valuation than the rest of the group. It carries some significant risks. The first big risk facing Alphabet is regulatory risk. The company faces several lawsuits in the U.S. and elsewhere that could result in interventions to reduce any monopolistic powers, particularly in web search and digital advertising. That could include things like selling its Chrome browser or its ad marketplace and ending agreements like its $20 billion per year traffic acquisition partnership with Apple. Despite those risks, the impact on Alphabet's operations could be muted given the strength of its brand and product. That's where the second risk comes in. Many see artificial intelligence (AI) chatbots like OpenAI's ChatGPT eating into Google's dominance of web search. In a hearing last month, Apple's Senior VP for Services, Eddy Cue, suggested iPhone users are searching less in 2025 and spending more time in AI apps. However, the data from Alphabet doesn't support the narrative that it's losing significant share to AI. In fact, AI may be a boon to its search business thanks to three new features the company's introduced to leverage the power of large language models. Its AI Overviews (and now AI Mode) have led to increased user engagement and satisfaction, as users expand the search queries they send to Google. Importantly, management says it's able to monetize searches with AI Overviews at the same rate as searches without it. Two other AI-powered features driving search are circle-to-search and Google Lens, which have increased valuable product searches on Google. One piece of Alphabet's business that has seen very strong results without much regulatory threat is its Google Cloud platform. The cloud computing segment is seeing strong demand fueled by AI, which pushed its revenue 28% higher year over year in the first quarter. Moreover, its operating margin expanded to 17.8% from just 9.4% last year, and there's still significant upside from there. Alphabet is also home to "Other Bets," which includes the leading self-driving car company, Waymo. Waymo's made significant progress in its robotaxi business and remains years ahead of the next closest competitor. It now completes 250,000 paid trips per week, as of its most recent update at the start of May. As the market expands, Waymo could prove a significant growth driver for the company. All this is to say, the company as a whole should conservatively be able to produce double-digit revenue growth for the foreseeable future despite the regulatory and competitive challenges it faces. And as Google Cloud and Waymo scale, they should enable even faster earnings growth. At a forward P/E close to 18, Alphabet's stock looks like a bargain among the Magnificent Seven. It's no wonder Klarman and his team have continued to add shares around this price. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Apple, and Tesla. The Motley Fool has a disclosure policy. Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
14 hours ago
- Business
- Globe and Mail
Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More
Seth Klarman is a well-respected value investor with a global following. And there's good reason for that. His Baupost Group hedge fund returned an average of 20% per year over the first 30 years of its existence. That performance comes despite value stocks falling well out of favor over the last decade. But Klarman and his team emphasize that they "remain flexible in their application" of value investing. That means investing in stocks that are mispriced relative to their value, even if they won't show up on any stock screeners for deep value based on traditional metrics. As a result, this method can end up with some stocks that many investors would consider growth stocks, such as those found in the Magnificent Seven. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » But Klarman only sees one member of the vaunted group of trillion-dollar stocks as worth his and his investors' money, and he just added more of it to Baupost's portfolio. The only Magnificent Seven stock Klarman likes The Magnificent Seven is a group of stocks full of interesting opportunities for the right investor. And anyone who invested in any or all of them is probably happy with their returns over the last couple of years. But a few may not present the value necessary for an investment from someone like Klarman. As a group, they're relatively expensive based on traditional valuation standards. Four of the seven sport forward P/E ratios above 30, including Tesla (NASDAQ: TSLA) with its 168 times multiple. While Tesla could prove worth the price with its plans for a robotaxi service and humanoid robots, there's a lot of risk in buying the stock at its current price, especially as its core car business is facing stiff competition abroad. The other high-priced members are growing quickly and on relatively solid footing, but it's hard to argue they're a bargain at their current prices. But one member of the group trades for a valuation below the S&P 500 's average, and that's kind of surprising for a stock with such strong growth potential. The stock has consistently traded at or near the lowest valuation of the Magnificent Seven, giving investors plenty of opportunities. That's why Klarman and his team have built up a position in Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), including adding 652,000 more shares in the first quarter, increasing its stake in the company by 46%. The best value among the Magnificent Seven There are good reasons for Alphabet to trade at a lower valuation than the rest of the group. It carries some significant risks. The first big risk facing Alphabet is regulatory risk. The company faces several lawsuits in the U.S. and elsewhere that could result in interventions to reduce any monopolistic powers, particularly in web search and digital advertising. That could include things like selling its Chrome browser or its ad marketplace and ending agreements like its $20 billion per year traffic acquisition partnership with Apple. Despite those risks, the impact on Alphabet's operations could be muted given the strength of its brand and product. That's where the second risk comes in. Many see artificial intelligence (AI) chatbots like OpenAI's ChatGPT eating into Google's dominance of web search. In a hearing last month, Apple's Senior VP for Services, Eddy Cue, suggested iPhone users are searching less in 2025 and spending more time in AI apps. However, the data from Alphabet doesn't support the narrative that it's losing significant share to AI. In fact, AI may be a boon to its search business thanks to three new features the company's introduced to leverage the power of large language models. Its AI Overviews (and now AI Mode) have led to increased user engagement and satisfaction, as users expand the search queries they send to Google. Importantly, management says it's able to monetize searches with AI Overviews at the same rate as searches without it. Two other AI-powered features driving search are circle-to-search and Google Lens, which have increased valuable product searches on Google. One piece of Alphabet's business that has seen very strong results without much regulatory threat is its Google Cloud platform. The cloud computing segment is seeing strong demand fueled by AI, which pushed its revenue 28% higher year over year in the first quarter. Moreover, its operating margin expanded to 17.8% from just 9.4% last year, and there's still significant upside from there. Alphabet is also home to "Other Bets," which includes the leading self-driving car company, Waymo. Waymo's made significant progress in its robotaxi business and remains years ahead of the next closest competitor. It now completes 250,000 paid trips per week, as of its most recent update at the start of May. As the market expands, Waymo could prove a significant growth driver for the company. All this is to say, the company as a whole should conservatively be able to produce double-digit revenue growth for the foreseeable future despite the regulatory and competitive challenges it faces. And as Google Cloud and Waymo scale, they should enable even faster earnings growth. At a forward P/E close to 18, Alphabet's stock looks like a bargain among the Magnificent Seven. It's no wonder Klarman and his team have continued to add shares around this price. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor 's total average return is995% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Apple, and Tesla. The Motley Fool has a disclosure policy.
Yahoo
a day ago
- Business
- Yahoo
5 ETFs That Beat the Market in the First Half of 2025
The first half of 2025 has been marked by heightened volatility and uncertainty triggered by the new administration's trade policies. The S&P 500 achieved an all-time high on Feb. 19 and then dropped sharply into striking distance of a bear market on April 8. Stocks have bounced back strongly over the past just a week away to end the first half, the S&P 500 is now just less than 3% below its peak, while the Nasdaq Composite index sits 3.4% from its all-time high. The Dow Jones Industrial Average is barely in the green for the year. As the gains were broad-based, we have presented a bunch of top-performing ETFs from various corners of the market that are at the forefront of the market rally in the first half of 2025. These are Sprott Gold Miners ETF SGDM, iShares MSCI Global Silver and Metals Miners ETF SLVP, Global X Defense Tech ETF SHLD, Global X Uranium ETF URA and AdvisorShares Psychedelics ETF PSIL. Trump's aggressive policy led to steep sell-offs in the stock market during the first half. After bottoming out on April 8, Wall Street made an impressive comeback driven by optimism over trade talks, corporate earnings growth, easing inflation and momentum in artificial intelligence. Most of the surge came from the technology sector. After months of turbulence, the Magnificent Seven stocks roared back in the latest market rally (read: S&P 500 Makes the Fastest Recovery Since 1982: 5 Best ETFs). The economic indicators paint a stable picture for economic growth. Americans have started to feel optimistic about the economy, as the initial shock from steep tariffs begins to wear off and inflation pressure eases. U.S. consumer sentiment climbed in June for the first time in six months, offering a glimmer of optimism amid lingering policy uncertainty. The U.S. jobs market also remained resilient with the economy adding more-than-expected 139,000 jobs in May, and the unemployment rate remaining unchanged at 4.2%. Inflation has been cooling. The Consumer Price Index rose just 0.1% year over year in May, putting the annual inflation rate at 2.4%. Inflation declined from April's 0.2% increase. Core inflation, which strips out volatile food and energy prices, was 2.8%, flat year over year, well below its levels in 2022 and 2023. Monthly core prices increased just 0.1%, against expectations of a 0.3% gain. However, the escalation in geopolitical tensions following the Israel-Iran strike last week is once again weighing on investors' sentiment. Further, the markets are grappling with uncertainty surrounding Trump's trade policies and the outlook for U.S. interest rates. This volatility has led to a spike in defensive assets like gold and silver. Sprott Gold Miners ETF (SGDM) – Up 65.2%Sprott Gold Miners ETF follows the Solactive Gold Miners Custom Factors Index, which aims to track the performance of larger-sized gold companies whose stocks are listed on Canadian and major U.S. exchanges. It holds 35 stocks in its basket, with Canadian firms taking the top spot at 75.2%, followed by 17.6% in the United States. Sprott Gold Miners ETF has amassed $418.6 million in its asset base and trades in a lower volume of around 42,000 shares a day. It charges 50 bps in annual fees from investors. iShares MSCI Global Silver and Metals Miners ETF (SLVP) – Up 56.2%iShares MSCI Global Silver and Metals Miners ETF follows the MSCI ACWI Select Silver Miners Investable Market Index, providing investors exposure to 30 companies that derive the majority of their revenues from silver exploration or metals mining. iShares MSCI Global Silver and Metals Miners ETF has an AUM of $322.1 million and an average daily volume of about 145,000 shares. It charges 39 bps in annual fees (read: ETFs Riding High on Multi-Year Record Silver Prices). Global X Defense Tech ETF (SHLD) – Up 56%With AUM of $2.7 billion, Global X Defense Tech ETF seeks to invest in companies positioned to benefit from the increased adoption and utilization of defense technology. It tracks the Global X Defense Tech Index and holds 42 stocks in its basket. Global X Defense Tech ETF charges 50 bps in annual fees and trades in an average daily volume of 1.1 million X Uranium ETF (URA) – Up 41%Global X Uranium ETF provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries. It tracks the Solactive Global Uranium & Nuclear Components Total Return Index and holds 48 stocks in its basket. Canadian firms make up the largest allocation in the basket at 38.2% while the United States accounts for a 20.8% share. Global X Uranium ETF has amassed $3.7 billion in its asset base and charges 69 bps in annual fees. It trades in an average daily volume of 4.5 million shares (read: Data Centers to Power Nuclear Energy and Uranium ETFs).AdvisorShares Psychedelics ETF (PSIL) – Up 39.2%AdvisorShares Psychedelics ETF invests in the emerging psychedelic drugs sector, offering exposure to biotechnology, pharmaceutical and life sciences companies that it sees as leading the way in this nascent industry. It is an actively managed fund and holds 24 stocks in its basket. AdvisorShares Psychedelics ETF has accumulated $10.8 million in its asset base and charges 99 bps in annual fees. It trades in an average daily volume of 11,000 shares. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Global X Defense Tech ETF (SHLD): ETF Research Reports iShares MSCI Global Silver and Metals Miners ETF (SLVP): ETF Research Reports Sprott Gold Miners ETF (SGDM): ETF Research Reports Global X Uranium ETF (URA): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Wall Street's Leading Stories of 1H25 and Outlook for 2H
The first half of 2025 has been defined by heightened volatility and uncertainty, largely stemming from the new administration's trade policies. After hitting a low in early April, Wall Street staged a strong rebound fueled by renewed optimism over trade negotiations, solid corporate earnings, easing inflation and continued momentum in artificial stocks led the charge, with the Magnificent Seven making a powerful comeback after months of the half-year mark approaches, the S&P 500 is now less than 3% below its record high, while the Nasdaq Composite is 3.4% off its all-time peak. The Dow Jones Industrial Average, however, remains only marginally positive for the year. Volatility is expected to persist in the second discuss these events in detail below with the stocks: On April 2, Donald Trump announced sweeping new tariffs dubbed 'Liberation Day' tariffs. These included a 10% baseline tariff on nearly all imports, with a few exceptions such as pharmaceuticals, semiconductors, and lumber. On top of the baseline, Trump introduced 'reciprocal' tariffs that targeted specific countries. China faced tariffs ranging from 34% to 54%, the European Union 20%, Japan 24% and Vietnam up to 46%. These tariffs officially took effect on April backlash and international criticism, the Trump administration issued a 90-day pause on tariff hikes for over 75 countries on May 12, though the 10% baseline tariff remained in place. Additionally, Chinese tariffs were reduced from a peak of 145% to around 30%, though they remained substantially elevated. On May 30, Trump doubled tariffs on imported steel, raising them from 25% to 50%, citing national security concerns and the need to protect U.S. actions faced legal scrutiny. On May 28, the U.S. Court of International Trade ruled that many of the tariffs were illegal under international trade law. However, the court also issued a stay, meaning the tariffs would remain in place pending tariff policies triggered an initial market rout, with trillions lost in just days. However, the partial pause in tariffs and the Fed's decision to hold interest rates steady led to a strong rebound. Some sectors emerged as clear winners. Companies like Palantir Technologies PLTR surged more than 90% since the April sell-off and recently hit a new all-time high. The stock saw a solid earnings estimate revision of 3 cents over the past 60 days for this year and has an estimated growth of 41.46%. Palantir Technologies has a Zacks Rank #3 (Hold) and a Growth Score of A. The S&P 500 hit a record high on Feb. 19 before tumbling toward bear market territory by April 8. However, the index staged a remarkable rebound, marking its fastest recovery since 1982. In May, it delivered the strongest performance since 1990 and the biggest monthly gain since November by this turnaround, a growing number of Wall Street strategists have turned bullish in recent weeks. Several firms have raised their year-end S&P 500 targets to the 6,300–6,500 range, reflecting renewed confidence in the market's outlook for the second half of NEM, having a Zacks Rank #1 (Strong Buy), is one of the best-performing stocks of the first half. The stock saw a positive earnings estimate revision of 5 cents for this year over the past month, with an estimated growth rate of 20.1%. Newmont has a VGM Score of A, indicating that it is poised for more gains ahead. You can see the complete list of today's Zacks #1 Rank stocks here. The race for the title of the world's most valuable publicly traded company has intensified in 2025, with NVIDIA NVDA and Microsoft MSFT locked in a high-stakes battle for market cap supremacy. Fueled by the explosive growth of artificial intelligence, the rivalry has captured Wall Street's full attention and is reshaping the tech landscape in real of June 18, Microsoft held a slight lead with a market capitalization exceeding $3.57 trillion. Its ascent was driven by robust cloud expansion, deepening AI integrations through its partnership with OpenAI, and continued dominance in the enterprise software space. NVIDIA, meanwhile, is capitalizing on an unprecedented demand cycle for its AI chips, rapidly scaling sales of its GPUs that power the very heart of AI computing. Since bottoming at just over $94 in early April, NVDA stock has added more than $1 trillion in market value. Growth-focused traders are flocking to NVIDIA for its unprecedented AI chip momentum, high margins and dominant position in next-gen essence, NVIDIA may be building the engine of the AI revolution, but Microsoft is constructing the operating system around it. Azure continues to be one of the fastest-growing cloud platforms globally, while Microsoft 365 and Teams have become indispensable tools in the modern digital workplace. Microsoft and NVIDIA have a Zacks Rank #3 (Hold) each. Gold stocks have surged in popularity this year, driven by a flight to safety amid growing global uncertainty. Investors are turning to the precious metal to shield their portfolios from the disruptive impact of Trump's tariffs on global trade and rising concerns of an economic slowdown. Gold recently soared to a new all-time high, topping $3,400 per ounce last tensions in the Middle East—particularly the Israel-Iran conflict—have intensified safe-haven demand, pushing both gold prices and gold-related equities higher. Additionally, a weaker U.S. dollar and continued central bank accumulation have further fueled gold's rally. Goldman Sachs forecasts that gold could climb to $3,700 per ounce by the end of 2025, reinforcing the bullish outlook for the metal and gold the potential beneficiaries is AngloGold Ashanti PLC AU, a global gold mining company with operations across Africa, the Americas and Australia. The company has seen a solid earnings estimate revision of 60 cents over the past 30 days for this year, with an estimated growth of 122.1%. Despite more than doubling year to date, AngloGold remains attractively valued, trading at a P/E ratio of 9.80 compared with the industry average of 3.26. The stock sports a Zacks Rank #1 and has a VGM Score of A, underscoring its compelling investment potential amid the ongoing gold rally. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Newmont Corporation (NEM) : Free Stock Analysis Report AngloGold Ashanti PLC (AU) : Free Stock Analysis Report Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Magnificent 7 May Need to Make Room for Broadcom
Broadcom joined the trillion-dollar club late last year, and its market value has continued to climb since. The software and chip company has been riding the AI wave as companies like Alphabet and Meta place orders for its custom AI chips. The tech giant's stock doubled in each of the past two years, climbing more than 350% from the start of 2023 to yesterday's close. With a $1.2 trillion market cap, Broadcom is the S&P 500's seventh-most-valuable company, worth more than either Walmart or Berkshire Hathaway. Broadcom's skyrocketing value has some Wall Streeters wondering whether it's time for a shakeup of the Magnificent Seven, which currently includes Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. READ ALSO: OpenAI Careens Toward Messy Divorce From Microsoft and Drones Steal the Paris Air Show Analysts expect Broadcom's sales to soar 22% this fiscal year and 21% in 2026. Broadcom reported earnings earlier this month that topped analysts' estimates after raking in $15 billion in revenue in its most recent quarter. Nvidia is the only company in the Magnificent Seven whose sales growth surpasses Broadcom's. In contrast, Tesla's revenue has contracted 1% this year, and its shares have tanked. The automaker's market cap is just above the $1 trillion mark. Four of the companies in the Magnificent Seven have seen their shares fall this year. Meanwhile, Broadcom's business is booming, especially its AI arm: Broadcom has a sprawling empire of technology that ranges from Wi-Fi and Bluetooth chips to cybersecurity software, but its custom AI chips now make up nearly a third of its revenue. The tech company made $4.4 billion of its revenue from AI in the second quarter (a 60% annual uptick) and expects $5.1 billion next quarter as cloud providers like Alphabet place more orders. The company predicts AI growth will continue next year. Name Games: The Magnificent Seven is a way of grouping together some of the S&P 500's most influential companies, similar to its predecessor FAANG (made up of Facebook, Amazon, Apple, Netflix, and Google before Facebook and Google changed their names). But some experts say the purpose of these groupings is to track trends, not just the most valuable companies. If the trend investors are eyeing now is AI, then swapping Tesla out for Broadcom may not make sense since Tesla is also leveraging AI (for robotaxis and humanoid robots). Another option might be to simply expand the Magnificent 7 to a Magnificent 8. This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. Sign in to access your portfolio
