Cash Flow Ranks Magnificent Seven Amid Record-High Stock Market
The stock market has been on a tear since early August, with all three major indexes hitting record highs. The Magnificent Seven, a group of trillion-dollar businesses that have been driving this growth, are led by artificial intelligence (AI) ambitions.
Cash flow is the best metric for evaluating these high-growth stocks, as they reinvest a substantial percentage of their cash flow into AI initiatives. Using Wall Street's consensus cash-flow-per-share estimates for 2027, we can rank the Magnificent Seven from most to least attractive based on projected cash flow.
The top two spots are occupied by Amazon and Meta Platforms, both with estimated forward-year cash flows below 12 times. These companies offer genuine bargains despite the historically pricey stock market. In contrast, Apple and Tesla are the priciest options, with estimated forward-year cash flows of 30.48 and 80.2 times, respectively.
Amazon's dominance in e-commerce and cloud infrastructure services makes it a compelling investment opportunity. The company's integration of generative AI and large language model solutions into Amazon Web Services has reaccelerated sales growth for this segment.