The Magnificent Seven have trained the investor community to recognize a clear fact that with big growth expectations, comes big prices as well. As per Yardeni Research numbers, the seven AI-driven companies are trading at around 28 times forward earnings, which is the highest among the S&P 500. In other words, owning the Magnificent Seven means that you have to pay a premium just to have the right to be there. However, just like in any exclusive club, one of the members, which is Meta Platforms, is associated with someone who snuck in unannounced.
Meta’s AI Spending Panic
Meta’s stock price decline that started in the middle of last year was no coincidence, instead it was an investor anxiety. In October, shares went down after CEO Mark Zuckerberg publicly proposed that the company would increase AI expenditures instead of restricting them. His talk during the earnings call was quite blunt as well.
“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”.
The market, which is very sensitive to uncertainty, interpreted the statement as entirely something else, and immediately took the exit route. However, that reaction is increasingly being seen as a classic case of investors mistaking the long-term value for short-term trouble.
Low-Priced Compared to the Magnificent Seven
A few months down the road, and the figures present a less scary picture. Despite all the chaos and drama, analysts are still predicting that Meta’s EPS will increase from $25.24 in 2025 to $28.70 in 2026, and it will be $33.11 in 2027.
This brings the forward P/E ratio for Meta to be just below 22, which is not cheap entirely and is expensive when compared to other stocks, but is very low in comparison to the Magnificent Seven. The even more amazing thing is that Meta is estimated to increase its revenue by about 18% this year, while its profit will also increase at a similar rate.
What Zuckerberg Actually Implied
Giving a more positive interpretation to Zuckerberg’s comments in October, they become less like a warning and more like presenting a strategic revelation. The investment of Meta in AI is already giving the company returns, yet not always in the neat quarter-by-quarter ways that the Wall Street adores.
The real danger, as he suggested, is not that the company would run out of money, but it is being too reluctant to spend, and will therefore miss out on the next wave of opportunity when it arrives.
The analysts seem to be on the same page, where most of them rated Meta as a strong buy, and agreed on a price target of $836, which is roughly 35% above the current levels. That is not a sign of blind optimism, but it is a gamble that the future of Meta powered by AI will be so great that it will make sense for the expenses of today.
Bottom Line
Meta is currently part of the Magnificent Seven, and it looks like that it is the only one where fear has brought opportunity. AI investments are indeed costly and on top of that, Zuckerberg is not the type of person to calm Wall Street’s carried nerves.
However, with good earnings growth to come, the lowest forward P/E ratio in the group, and analysts being very supportive, Meta is definitely the most reasonably priced giant among an expensive lineup. This Magnificent Seven stock does not appear to be reckless for January 2026 at all, instead it appears to be quite the misjudged one.
