Magnificent 7 Stocks, Ranked Best to Worst in 2024

Summary

The video discusses the 'Magnificent 7,' a group of high-performing tech stocks including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. It explores their market dominance, comparing their collective market cap to major economies, and questions whether their valuations reflect a bubble or a new normal. The video then ranks these companies based on qualitative and quantitative analysis, considering factors like business quality, financial track record, future outlook, and current valuations. It also touches on challenges such as competition and geopolitical issues, particularly for Apple and Tesla in China.

Takeaways

• 📈 The 'Magnificent 7' refers to seven high-performing and influential tech stocks: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
• 🌐 The combined market cap of the 'Magnificent 7' is equivalent to the entire stock market cap of Japan, Canada, and the UK, and surpasses the GDP of all countries except China and the United States.
• 🔄 The 'Magnificent 7' have shown resilience, with four out of the seven companies increasing their valuations in the first two months of 2024.
• 📊 The ranking of these companies is based on a qualitative vs. quantitative approach, evaluating business quality, financial track record, future outlook, potential, and current valuations.
• 🏆 Microsoft leads the ranking with a strong business model and a blended score of 7.8, considering both quality and valuation.
• 📱 Apple and Alphabet (Google's parent company) share a blended score of 6.4, with Apple's valuation being considered fair and Alphabet's valuation being attractive.
• 🤖 Tesla, despite its innovative projects, receives a lower blended score of 5.2 due to concerns about its valuation and dependency on the Chinese market.
• 🚀 Nvidia, a favorite in the AI boom, has a blended score of 6.8, reflecting its superior offerings in hardware and software integration, though its valuation is seen as high.
• 🔮 The 'W Factor' is introduced as a multiplier to the score, representing a company's potential, with Nvidia and Tesla receiving the highest multipliers for their exciting outlook and potential.
• 🔍 The video emphasizes the importance of investors conducting their own analysis and judgment, as the ranking is subjective and based on the current market environment.
• 🔄 The script highlights the dynamic nature of the tech industry, where companies must continuously innovate and adapt to maintain their market positions and valuations.

Q & A

What is the significance of the term 'The Magnificent 7' in the context of the stock market?

The Magnificent 7 refers to a group of seven high-performing and influential technology stocks, specifically Alphabet (Google), Amazon, Apple, Meta Platforms (Facebook), Microsoft, Nvidia, and Tesla. These companies have a significant market capitalization and impact on the stock market.

How does the market capitalization of The Magnificent 7 compare to other global financial benchmarks?

The combined market capitalization of The Magnificent 7 is equivalent to the entire stock market capitalization of Japan, Canada, and the United Kingdom. It is also larger than the GDP of every country in the world except China and the United States.

What factors contribute to the high market valuations of The Magnificent 7?

The high market valuations are attributed to their strong performance in the technology sector, their influence on the stock market, and their ability to generate consistent profits. Their market capitalization reflects investor confidence in their continued growth and dominance in their respective industries.

What is the role of China in the context of The Magnificent 7, particularly for Apple and Tesla?

China plays a significant role as both a production base and a market for Apple and Tesla. However, recent economic slowdowns and increased competition from Chinese producers have led to a decline in sales for these companies, affecting their market valuations.

How does the video script suggest ranking The Magnificent 7?

The script suggests ranking The Magnificent 7 based on a blend of qualitative and quantitative factors. The qualitative aspect includes the quality of the business, economic moat, and sustainability of profits, while the quantitative aspect considers financial performance over the last five years, financial ratios, and current valuations.

What is the qualitative to quantitative scoring ratio used in the ranking system?

The ranking system assigns 80% of the score based on the quality of the company and 20% based on the company's current valuations and financial ratios.

What is the estimated intrinsic value of Alphabet (Google) according to the video?

The estimated intrinsic value of Alphabet (Google) is between $160 to $180 per share.

How does the video script address the future of Google Search with the rise of AI and large language models?

The script acknowledges that the future of Google Search seems uncertain with the rise of AI and large language models like GPT. It suggests that there is a potential shift in how users retrieve data, which could impact Google's dominance in the search engine market.

What are the key strengths of Apple as a company according to the script?

Apple's key strengths include brand monopoly, customer loyalty, high switch costs, and barriers to entry. These factors contribute to its strong position in the market.

What challenges is Apple facing in China, and how does it affect its market valuation?

Apple is facing challenges in China due to its reliance on the country for production and domestic demand. A drop in sales and market share in China, along with geopolitical tensions, has led to a reevaluation of Apple's market valuation.

How does the script evaluate the potential of Tesla and Nvidia in terms of future growth?

The script recognizes Tesla and Nvidia as having exciting futures and potential, particularly in areas such as full self-driving, robotics, and artificial general intelligence (AGI). However, it also cautions that these potentials require a good rate of return and may need significant imagination to justify current valuations.

Outlines

00:00

📈 Market Cap and Valuation of The Magnificent 7

This paragraph discusses the market capitalization of the Magnificent 7, a group of seven high-performing and influential technology stocks, which includes Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. It compares their combined market cap to the entire stock market of Japan, Canada, and the UK, and notes that it is larger than the GDP of every country except China and the United States. The paragraph also introduces the topic of whether the current valuations indicate a bubble or represent a new normal. It references an infographic and write-up from KOBC Letter as of January 4th, 2024, and discusses the continued growth of these companies despite skepticism.

05:00

🤔 Evaluating the Magnificent 7: Quality and Valuation

The paragraph delves into the criteria used to rank the Magnificent 7, focusing on qualitative aspects such as the quality of the business, economic moat, and sustainability of profits, as well as quantitative factors like financial track record and current valuations. It explains the scoring system used, with 80% of the score based on qualitative factors and 20% on quantitative valuations. The paragraph also introduces the first company in the ranking, Alphabet, and provides an analysis of its market position, network effects, and potential risks from emerging technologies like GPT models. Alphabet's quality score is given as 6, and its valuation score as 8, resulting in a blended score of 6.4.

10:01

🍎 Apple's Market Position and Challenges

This section continues the analysis by focusing on Apple, discussing its strong brand monopoly, customer loyalty, and high switch costs. However, it also highlights the challenges Apple faces due to its reliance on China for production and sales, which is complicated by the current geopolitical climate. Apple's sales in China have dropped significantly, affecting its market share. Despite these challenges, Apple's quality score is given as 7, and its valuation is considered fair, resulting in a blended score of 6.4, similar to Alphabet.

15:03

💡 Microsoft and Meta Platforms: Diversification and Innovation

The paragraph discusses Microsoft's strong business model, diverse portfolio, and continuous innovation, leading to a quality score of 9. It also covers Meta Platforms' recent struggles and transformation, with a focus on their investments in AI and efforts to adapt to changes in the digital advertising landscape. Microsoft's valuation score is 3, due to a slightly overextended valuation, resulting in a blended score of 7.8. Meta Platforms, on the other hand, is given a quality score of 7 and a valuation score of 3, leading to a blended score of 6.2.

🛍️ Amazon and Tesla: Growth Prospects and Valuations

This section analyzes Amazon and Tesla's current positions and future prospects. Amazon is seen as turning a corner after its investment cycle, with a strong foundation for growth in e-commerce, advertising, cloud, and logistics. It receives a quality score of 8 and a valuation score of 6, resulting in a blended score of 7.6. Tesla's valuation, however, is more contentious, with its high price-to-sales ratio being justified by its potential in self-driving, energy, and robotics. Despite its strong brand and capabilities, Tesla's valuation score is 2, leading to a blended score of 5.2.

🚀 Nvidia's Potential in the AI Era

The final company discussed is Nvidia, which is seen as a leader in AI GPUs and software-hardware integration. While its quality is highly regarded, its valuation is considered lofty and driven by momentum. Nvidia's quality score is 10, but its valuation score is 2, resulting in a blended score of 6.8. The paragraph concludes with a discussion on the potential or 'W Factor' of the companies, with Nvidia and Tesla receiving the highest multipliers due to their exciting outlook and potential in areas like self-driving, robotics, and AGI.

Keywords

💡Market Cap

Market Cap, or market capitalization, refers to the total dollar market value of a company's outstanding shares. It is calculated by multiplying a company's shares outstanding by the current market price of one share. In the context of the video, the market cap of the 'Magnificent 7' is compared to the entire stock market in Japan, Canada, and the United Kingdom combined, emphasizing their significant size and influence in the global market.

💡GDP

Gross Domestic Product (GDP) is the total value of all goods and services produced over one year in a country. It is a broad measure of a country's economic activity and health. In the video, the GDP is used as a comparative metric to highlight the immense market cap of the 'Magnificent 7', suggesting that these companies have grown to sizes that rival entire national economies, except for China and the United States.

💡Bubble

A bubble in financial terms refers to a situation in a financial market where asset prices are trading at levels significantly above their intrinsic values, based on fundamental analysis. It is often associated with speculation and increased risk of a market crash. In the video, the term is used to question whether the high valuations of the 'Magnificent 7' represent an unsustainable market condition that could lead to a correction or crash.

💡Investopedia

Investopedia is a website that provides free, comprehensive, and easy-to-understand educational content and tools about finance and investing. It is a reliable source for definitions, explanations, and insights into financial concepts. In the video, Investopedia is referenced to define the 'Magnificent 7' as a group of high-performing and influential stocks in the technology sector.

💡Valuation

Valuation in finance refers to the process of determining the economic value of an asset or a company. It is a critical aspect of investment analysis, helping investors decide whether the current market price of a stock is justified based on its intrinsic value. The video discusses the valuation of the 'Magnificent 7' to assess if their current market prices are fair or overextended.

💡Economic Moat

An economic moat is a term used to describe a business's ability to maintain a competitive advantage over its rivals. It is often associated with barriers to entry that make it difficult for new competitors to challenge the company's market position. The concept is used in the video to analyze the sustainability of the 'Magnificent 7' companies' profits and their potential to be disrupted in the future.

💡Network Effects

Network effects occur when the value of a product or service increases as more people use it. This phenomenon is common in technology companies, where platforms like social networks or search engines become more valuable as they attract more users. In the video, network effects are mentioned as a key factor contributing to the success and dominance of companies like Alphabet, particularly in their search engine and advertising businesses.

💡Monopoly

A monopoly is a market structure where there is only one seller of a particular product or service, giving the seller the power to control the price and other aspects of the market. In the context of the video, the term is used to describe the dominant market position of certain 'Magnificent 7' companies, such as Alphabet, which owns two of the most important properties on the internet, Search Engine and YouTube.

💡Artificial Intelligence (AI)

Artificial Intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think and learn like humans. AI is a transformative technology that is being integrated into various sectors, including technology stocks discussed in the video. The companies in the 'Magnificent 7' are at the forefront of AI development and application, which is a key factor in their valuation and future potential.

💡Supply Chain

A supply chain is the network of businesses involved in the production and distribution of a product, from raw materials to the end consumer. It includes the processes, people, entities, information, and resources needed to produce and deliver a product or service. In the context of the video, the supply chain is relevant to companies like Tesla, which relies on a complex global network for manufacturing and distribution of its electric vehicles.

💡Diversification

Diversification is a risk management strategy that involves investing in a variety of assets or sectors to reduce exposure to any single asset or risk. It is a key strategy for businesses looking to spread their revenue streams and minimize the impact of a downturn in any one area. In the video, diversification is highlighted as a strength of Microsoft, which has a broad portfolio across hardware, software, gaming, cloud, and artificial intelligence.

Highlights

The market cap of the Magnificent 7 is equivalent to the combined stock market value of Japan, Canada, and the UK.

The Magnificent 7's market cap surpasses the GDP of all countries except China and the United States.

The term Magnificent 7 refers to a group of seven high-performing and influential tech stocks, including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.

The Magnificent 7's market performance in the first two months of 2024 defied expectations, with four out of seven companies seeing higher valuations.

Investopedia defines the Magnificent 7 as a group of stocks in the technology sector with significant market influence.

The president of YY Research suggested that the Magnificent 7 may not be as magnificent due to internal fragmentation.

China's economic downturn affects Apple and Tesla sales, impacting their market valuations.

The ranking of the Magnificent 7 is based on qualitative and quantitative analysis, including business quality, financial track record, future outlook, and current valuations.

Alphabet's quality score is affected by the potential disruption of Google search by AI and large language models.

Apple's quality score is impacted by its complicated relationship with China and a drop in sales there.

Microsoft is recognized for its strong business across software, hardware, gaming, cloud, and AI, earning a high quality score.

Meta Platforms' quality score reflects its focus on AI capabilities and efforts to innovate despite past challenges.

Amazon's business is seen turning a corner with a focus on customer satisfaction and growth in e-commerce, advertising, and cloud services.

Tesla's valuation depends on the perception of its future beyond being just a car company, with potential in full self-driving, energy, and robotics.

Nvidia's valuation is influenced by its leadership in AI GPUs and potential growth into new markets.

The final ranking of the Magnificent 7 places Microsoft at the top and Tesla at the bottom based on the blended scoring system.

The ranking exercise is not prescriptive and encourages investors to conduct their own analysis and judgment.

Transcripts

the market cap of The Magnificent 7 is

now the same size as the market cap of

the entire stock market in Japan Canada

and the United Kingdom combined also the

Magnificent 7 has a larger market cap

bigger than the GDP of every country in

the world other than China and the

United States so is this a bubble or The

New

Normal

so this infographic and write up from

kobc letter was accurate as of gen 4th

2024 so for those of you who thought

that the max 7 couldn't rally any higher

the snop market went ahead to prove most

of us wrong with four out of the seven

names pushing for higher valuations in

the first two months of 2024 so

according to Investopedia the

Magnificent 7 is a term that has been

repurposed to refer to a group of seven

High performing and influential stocks

specifically in the technology sector so

these seven companies are alphabet

Amazon Apple meta platforms Microsoft

Nvidia and Tesla so the Genesis of this

video idea was actually pretty

interesting so it was essentially

triggered by a headline that had seen

somewhere so at YY the president of YY

research recently made a remark stating

that the Magnificent 7 isn't all that

magnificent suggesting that there was a

fragmentation within the ranks itself so

my interest was further picked when he

published a short article on YY quick

takes with the title two of The

Magnificent Seven get Shanghai and if

you attempt to decipher its meaning it's

probably due to their involvement with

China by extension so long story short

China is in the recession Chinese

consumers are buying fewer Apple's

iPhone and also Tesla's electric vehicle

which made the two of them much more

less magnificent and these two companies

are also facing much more competition

from Chinese producers producing similar

consumer goods and therefore the share

price has also reflected this economic

reality so in this video I will attempt

to rank the mech 7 based on a few

in-house chosen criteria such as the

quality of the business and the strength

of their economic mode their past

Financial track record future outlook

and potential and of course most

importantly the current valuations so

just a disclaimer this ranking exercise

is not meant to be prescriptive and

please exercise your own analysis and

Judgment at the end of the day so with

that out of the way let's get right into

our framework so let's look at these two

key components when trying to determine

their rankings qualitative versus

quantitative approach so qualitatively

how is the business doing are they

fending of their competition well are

they able to earn above industry margins

and more importantly are they able to

keep these profits and how sustainable

the profits are quantitatively how have

they been performing Over The Last 5

Years how are their financial ratios and

balance sheet looking if we do a

modeling to project our future cash

flows are they trading at a fair

valuation so I believe many investors

tend to look at these two factors as

opposing ends and they liely on a

spectrum intuitively if you think about

it a lowquality business will tend to

trade at a cheaper valuation and vice

versa so that's why they are on opposing

skills and that's what I'll try to

establish when we are looking at the

individual Max seven names so I'll be

giving each of them a score of 1 to 10

with one being the lowest and 10 being

the highest or the best and it will also

be a score Blended across different

factors and this is how it will

generally work so I'll be placing more

emphasis on the quality of the company

based on the simple 8020 heru so 80% of

the score will be determined by the

quality aspect of the analysis while 20%

will be determined by their numbers and

valuations it's trading at today so in

this specific 80% breakdown we will take

into account the consistency of the

margins comparing it to Industry

averages and also more importantly our

opinion of whether the business has a

wide narrow or even low economic mode

essentially this is the long-term view

of whether the business would be

disrupted in the next 5 10 10 or even 20

years so in the other 20% I think I'll

keep it simple by using a blended

approach using various valuation methods

such as PE forward PE price earnings

growth and even a discounted cash flow

so now let's go down the list first

let's take a look at alphabet the parent

company of Google so intuitively we

would expect alphabet to score very high

on the quality aspect and alphabet

currently owns two of the most important

properties on the internet SE and

YouTube they essentially have a brand

Monopoly and when the company's product

is used as a verb I think it speaks

volumes of how strong and recognizable

the brand is they benefit immensely from

Network effects particularly in their

search engine and also advertising

creating a perfect Lo from data

collection to training the algorithms to

improving the user experience and most

importantly delivering the right results

to meet the user's need it's a

self-reinforcement cycle so their

current scale has also enabled them to

reap huge advantages specifically on

creating extremely high barriers to

entry enabling them to monopolize the

search Market even until today however

the Outlook of Google search has started

to seem murky with the proliferation of

check GPT and large language models

alike at the end of 2022 so we have made

a separate video outlining the risk and

concerns about the future of Google

search and you can hit over for a more

detailed explanation so search is

currently under intense scrutiny given

the potential shift and how users

retrieve data in the coming future so

before GPT I would have given alphabet a

solid eight right now I think we can

only settle with a six for Quality so

for Google's current valuations I

believe it's undemanding in fact out of

the Mac 7 counterparts regardless of how

you slice and dice it whether is it on a

forward PE on a PEG ratio its valuations

is one of the lowest out of the seven so

using our in-house investing tool the

True Value Finder we estimate the

intrinsic value of Google to be right

between $160 to

$180 therefore we think that alphabet

deserves an eight for valuation it being

pretty attractive which means that

alphabet has a blended score of 6.4

second let's talk about Apple so Apple

was always the darling of Wall Street

maybe because of Warren Buffett but it

has been one of the most respected and

well-run Enterprises the world has ever

seen brand Monopoly Customer Loyalty

High switch cost barriers to entry

economies of skill you name it Apple has

it so the problem today Apple's

complicated relationship with China so

not only do they rely on China for their

production capacity but they too rely on

their domestic demand which makes up

around 20% of their sales so considering

the state of global Affairs currently

apple is balancing on very tight rad

just recently it was announced that

Apple sales in China dropped 24% in the

first 6 weeks of of 2024 compared to the

same period in 2023 so the iPhone market

share in China has also sleep to 16% in

2024 falling to Fourth Place compared to

the second place in 2023 when they had

around 19% market share so it's true

that apple is still able to charge

premium prices for their products due to

the perceived brand quality but this

important Chinese pie is shaking the

entire boat so for this I will c a seven

to Apple's quality so from a valuation

perspective apple is definitely trading

at a premium valuation when compared to

the overall large cap index but really

to what extent is it Justified so

according to our calculations we think

that Apple's IV should be right around

160 to 170 and even after the recent

fall it's still right around fair value

therefore I would think that a score of

fall would be suitable which means that

Apple alongside alphabet also has a

blended score of 6.4 third Microsoft so

Microsoft is probably one of the

strongest businesses we have seen in

this decade king of software a portfolio

across hardware and software gaming

cloud and even artificial intelligence

now with cat GPT and big so some will

see investing in Microsoft as being

equivalent to buying into an ETF

exchange Trader fund due to its

Diversified nature Microsoft is always

on the offense from the blizzard

acquisition in the gaming division to

the partnership with open Ai and going

after the launch of rival tech companies

like Google I think there's not much to

argue here Microsoft's quality will be a

solid nine so why not 10 you might ask I

guess it's just the Asian Gene in me my

parents always told me since young you

can do better so let's hold back the

last point so that Microsoft doesn't get

too ahead of themselves on the valuation

front we think that they might be

slightly overextended so I understand

why everyone wants a piece of this pie

which explains the premium valuation

they're currently trading in therefore

we'll give Microsoft a valuation score

of three bringing its Blended score to a

7.8 fourth meta platforms so both Mark

Zuckerberg and meta platforms had been

through a wild ride the recent runup

came on the heels of a 75% decline back

in 2022 from its peak due to a myad of

concerns from stagnating growth rates to

margin destructions to frivolous

spending on AR and VR and more

importantly a sure disregard for

shareholder value at least that what

most bears were arguing for in the

better part of 2022 so Zuckerberg has

came out to clarify in multiple earning

score that a majority of their

Investments are into the AI capabilities

of the Legacy business namely Instagram

WhatsApp and Facebook iterating and

building on their existing ads

architecture and more importantly

innovating their way out of the new

Apple updates which heavily restricted

the ads targeting so moving forward we

are very optimistic about Matter's

contined push for innovation in their

discovery engine and also their open-

Source large language model that uses AI

to generate text images and quotes

essentially equipping their merchants

and customers alike with the tools that

they need to level up their reach and

also their scale at meta's current stage

I think seven is a conservative estimate

of their quality on the valuation side

we think that meta is worth right around

$420 to

$450 hence tagging them with a score of

three at their current price tag of near

$500 per share bringing meta's Blended

score to a solid

6.2 five Amazon fundamentally we see

Amazon's business turning around the

corner coming out gradually from its

investment cycle so we look forward to

Amazon continuing to optimize the cost

structure and exit from the heavy Kack

spending era so Logistics is an

extremely tough business and Shopify

acknowledges that too they have

completely sold out Shopify Logistics to

flx sport last year however from a mode

building perspective Amazon has only one

goal in mind which is to satisfy the

current customers therefore given its

current positioning Amazon has managed

to amess some of the highest quality

customers with Amazon Prime providing

top-notch experience enabling them to

maintain their lead in e-commerce and

grow their advertising arm aggressively

so let's also not forget about the crown

jeo AWS so Amazon web services enjoys a

a durable and profitable Network effect

as more applications are built the

system attracts new developers as that's

where customers and datas are add which

then generates more data and application

creating more value for customers so

this network effect is further

compounded as they scale and retain the

customers due to the high switching cost

so given the multiple engines of growth

from e-commerce to advertising to Cloud

to Logistics each compounding on one

another's strength we do see Amazon as

having a very very strong foundation for

the growth in the decades ahead awarding

it a quality score of eight so when

looking at Amazon's valuation using a

sum of the parts model we do find Amazon

competitively priced with a small margin

of safety at current valuations of right

around $170 per share hence we do think

the Amazon is fairly priced giving it a

valuation score of six which means that

its Blended score is sitting at around

7.6 number six Tesla so like it or not I

will end up offending one group of

investors by having an opinion on this

company so I'll Trad extremely carefully

so Tesla has had phenomenal success and

execution over the last few years so the

stock price aside I think the company

has executed superbly so to understand

Tesla's valuation today it really

depends on how you see the future of the

company on the bearish side if you view

Tesla as solely a car company today's

valuations might look a little lofty as

they sit at a price to sales of around

five to six times while comparable

companies like Toyota Ford and GM they

have a price to sales ratio of3 to one

times however if you to ask the Tesla BS

they will be showing you the other side

of the story where the car is

essentially just a trojan horse for

Tesla to sell you something better like

full self-driving to energy to even

robotics in the future arguably Tesla is

right at the start of multiple as curves

as they claim so while I do believe that

Tesla is working on exciting projects

and Elon Musk is someone who we wouldn't

want to bet against but I still prefer

to air on the side of conservatism so

for now it seems like many of these

exciting projects stay exciting but its

potential profits require quite a bit of

imagination so I do see the strength of

Tesla's brand Advantage charging

infrastructure and more importantly its

manufacturing capabilities so a quality

score of six should be fair however on

the valuation front that's really up to

debate like previously mentioned it

really depends on where you see Tesla's

future is so to us Tesla definitely feel

a little too pricey for liking and

considering the circumstances of the

Chinese supply chain demand and

competition we don't think we can

justify a high valuation for Tesla here

therefore we think that they would bring

a valuation score of right around two

bringing its Blended score to be 5.2 and

last but but not least number seven it's

everyone's favorite in this AI boom

Nvidia so when talking about Nvidia

you'll probably meet two different

groups of investors so one group

completely writes them off as they

cannot make sense of the current

valuations using a real view mirror when

looking at the Historical earnings

meanwhile the other group is extremely

optimistic about the future of AI gpus

and the software Hardware integration of

Nvidia crowning it the iPhone moment for

NVIDIA

so truth be told I'm somewhere in

between so I don't think we should throw

the baby out with the bath water so I've

watched and listened to many intelligent

investors making their case for

investing into it today so reasons

ranging from Superior Hardware and

software integration to phenomenal fight

in the fores before the competitors into

both crypto and Ai and of course how

groundbreaking and instrumental this AI

wave would be in the coming decades so

the bigger question is how sustainable

the pace of trip buying can be and also

will the total addressable Market be big

enough for NVIDIA to grow into to

justify today's valuations and on top of

that require a good rate of return so in

terms of quality I think there's no

doubt no competitors actually come close

to what Nvidia can offer giving them a

solid it on the quality aspect for

valuations however it's really a while

guess we do think that large part of the

valuations were carried by momentum and

right now it's to half appeal to swallow

therefore I think that investors should

be cautious when entering at today's

valuations so personally I want to give

it a one but let's settle with two

bringing nvidia's Blended score to be

6.8 so after listing Company by company

this is the final ranking of the mech 7

based on the Blended scoring system so

with Microsoft being the first and Tesla

being the last so feel free to agree or

even disagree in the comments down below

but to our viewers who are extremely

bullish on Tesla and I know that there's

a large group of you out there hold your

horses I can already feel the criticisms

coming our way FBI open up so here's the

thing if to only judge based on

valuations and quality that is just two

Dimensions so to further expand the

discussion I'll introduce a third

dimension which is the company's

potential or some of you might actually

call it the W Factor so I'll basically

apply a multiplyer to the score which

acts as some sort of a b bonus to give

you a more complete expectations of the

company's Outlook I've applied the

highest multiplier to both Nvidia and

Tesla because they have the most

exciting Outlook and potential out of

the Mac 7 punch from Full self driving

to robotics to even AGI artificial

general intelligence that's it I'll just

like to remind everyone that this

ranking is not prescriptive and it is

just my opinion of the company in

today's market environment and of course

potential will stay as potential if

they're unable to execute and convert it

into profits and cash flows in the

future so if you're interested in how we

get our intrinsic value calculations of

these different companies ban profits

has a powerful tool that helps you

discover the right prices to enter into

these stocks so check out our True Value

Finder to find undervalued deals in the

link below now so this is CK from pan

profits signing off until next time keep

winning

[Applause]