If You're Not Buying The Mag 7 At These Prices You Will Regret It Forever

The most popular stocks on the planet for the last few years, the Magnificent 7, are getting dumped. Regular investors are fleeing them at the fastest pace in four years. And as a group, they're actually losing to the market this year. People have started calling them the Lag 7. But here's the twist. That means these giants are now the cheapest they've been in over a decade. So, is everyone running away right before the best opportunity? Today, we're going to find out exactly that. So let me set the stage because something strange is happening. For two straight years, the Magnificent 7, these are companies Microsoft Meta Nvidia Amazon Apple Tesla, and Google, they carried this entire market. Everybody owned them. Everybody loved them. But in 2026, that is absolutely flipped. As a group, they have fallen behind the market this year while the S&P is up around 9%. In fact, only one of the seven, which is Google, is really beating the market right now. The rest are lagging so badly that people have started calling them the lag seven, which I think is a great great word. So, if I told you last year at this very time, you would have probably laughed in my face. That's how quick narratives change. And guys, we've said it in many videos in the past, someday people would get annoyed and move on from the Mag 7 just like they did Fang. So right now, according to Croup, regular retail investors now make up 6% of the trading in these stocks, the lowest level in four years. So where is that money going instead? It's going into chip stocks and into new companies like SpaceX. The crowd has simply moved on to the next shiny thing, which they do time and time again. But here's the part that should make a value investor's ears perk up. These giants got left behind. They're now trading at their cheapest price compared to the rest of the market in over a decade. For most of the 2020s, you had to pay about a 30% premium just to own them. Today, according to Morgan Stanley, that premium has shrunk to around 10%. What's the translation there? The most dominant companies in the world just went on sale compared to where they were. The big question is why? And is that fear actually justified? The answer comes down to one word, spending. Specifically, a kind of spending called capital expenditures or capex for short. Capex is very simple. It's just the money a company's going to spend on big long-term things. Think building, equipment, and right now gigantic AI data centers packed with incredibly expensive chips. Here's the number that's scaring Wall Street. These seven companies are on track to spend over $700 billion on AI this year, up about 70%. That's an almost unimaginable pile of money. And all that spending eats into their free cash flow, which is very simply the cash a company produces and is available to return to shareholders. We call it the lifeblood of the business. When the cash that they produce shrinks, nervous investors panic and head for the door. But now I have to teach you the single most important idea in this whole video and it comes straight from Warren Buffett. There are two very different kinds of capex. The first is maintenance capex. This is money that a company is forced to spend just to keep the lights on and stay exactly where it is. Now, it's not actually like utility bills, but it's things like repairing machines, continuing the operation of the building, making of the business, making roof repairs, things like that that they need to do just to make sure that they continue making their business happen. That's a cost you simply cannot escape. The second one, though, is growth capex. This is the money that a company chooses to spend to expand and make even more profit down the road. That could be considered a short-term cost, but it is also seen as a long-term investment. And this is exactly what famous investor Bill Aman has been pounding the table on. He recently bought Microsoft, Meta, and Amazon. And his point was very simple. You should not punish a great company for reinvesting in itself to earn bigger profits later. That's the whole goal of a business. And he is absolutely correct. So the real question back to this Mag 7 that the skeptics are asking is this. Will all this AI spending actually pay off with strong returns? Or will it just keep climbing forever and burn cash with nothing to show for it? Because if that $700 billion is a smart investment, these cheap prices are a gift to us as investors. But if it's money that's being lit on fire, the cheapness could be a trap. And that right there is the difference between buying a real business and chasing a story or narrative. So, let's run all seven through our stock analyzer and figure out which one is which. Let's start off with Meta, the company behind Facebook, Instagram, and WhatsApp. Meta is one of the very biggest AI spenders of the whole group, and it's one of the stocks that Bill Aman just bought. So, the entire debate lives right here. Is Meta's massive AI spending going to supercharge its advertising business for years or is it a money pit? So, let's run the numbers. So, guys, what's the price on Meta? For those of you who are new to our channel, the price is the market cap. The stock price is merely the market cap divided by all the shares outstanding. So, I focus on the market cap. It's 1.69 trillion. The next thing I do is I go to the enterprise value. The difference between the market cap and enterprise value right here is about $70 billion. That's essentially the net debt of the business. If you take the cash offset the debt, this is the debt remaining. Now, is that a lot of debt? It feels like it is because it's $70 billion. But you've got to compare it to their free cash flow. 48 billion last year. Now, the good news is Meta still has a lot of free cash flow even after their big capital expenditures and they can still pay off their debt in less than two years of last year's free cash flow and less than two years of their 5-year average free cash flow. So, big numbers there. Next, returns on capital. So, this is important in this capex game. Are they able to invest money and get high rates of return on it? That's what the return on invested capital will show you. And the higher it is, the better quality the business it is. This is telling me this is a high quality business. Anything that I consider anything like mid- teens and above very high quality. Even low double digits is still good as long as it's getting better. Next guys, their PE is 24. Their price of free cash flow is 35. Why such a big difference? As we know that over long periods of time, net income and free cash flow should be the same. But remember, their capital expenditures eat away at free cash flow. What I want to remind you is it takes years for those capital expenditures to be seen in net income because it's depreciated over seven or 10 years. Maybe a little bit five, but the bottom line is net income here is definitely higher than free cash flow. Usually that's a red flag for me, but we know why this is. Let me show you guys the cash flow statement real quick to show you this exact thing I'm trying to talk about. Free cash flow is cash from operations less your capital expenditures. Look at the capital expenditures here. Let's go back to 2020. 15 19 31 27 37 707 75. Their capital expenditures are up 5x in the last 6 years. That's going to hurt your free cash flow in the short run. So I'm okay with that for right now. But let's go back and look at a few more metrics here. Now one thing that does surprise me, their gross profit is really high. 82%. That means every extra dollar they bring in revenue, 82 cents of it is profit before overhead and taxes. But what's interesting to me is, but look at their profit margin. It's about the same over the last 10 years. I would have thought with such a high gross margin and a business that's growing their revenue this much that their gross that their profit margin would be a lot higher. It is not. Maybe they're just spending along the way to increase their quality. That could be the case. And the other thing I love is these revenue growth numbers over the last three, five, and 10 years are all huge without a lot of acquisitions. So it shows that the company is naturally growing very quickly. All right. Next, let's look at our eight pillars here. Let's see the story it's telling us. So guys, we have a 5-year PE of 35, 5-year price of free cash flow 41. Now, in this situation, same thing. The PE is also lower because their 5year net income is higher than their 5year free cash flow. They get those high returns on capital. They're buying back some shares, which is good if they're buying them at cheap prices. Their cash flow is up over the last 5 years. Their net income is up over the last 5 years. Revenue is up. And their debt is reasonable. Now, I want to show you guys some things right here. Look at these quarterly shares outstanding. What I like here is this is the bad part where their stock went down to $88 a share and they bought back a lot of shares. I love that. They did a great job of doing that. Now, I just threw a lot at you and if it feels overwhelming, guys, trust me when I say this, you are not alone. My goal here and the reason I created this YouTube channel was to simplify all of this for everyday people because guess what? Successful investing is not about being some mathematician. You should be able to do successful investing in a very simple way. That's why we created our software. Now, I've made it a lot easier for you. I've created an absolutely free key metrics PDF. It'll explain all of these key metrics to you so that you and I are speaking the same language and you can learn at your own pace. So, if you're interested, click the link in the description below or in the first pin comment. Download the key metrics PDF in a matter of seconds. And now, not only will you understand things better as you do your own research, you'll be able to refer to them much easier and in your group chats, you're going to sound a lot smarter than everybody else because you're going to be light years ahead of them. So next, let's go look at what the analysts think about this company's growth potential. The first is earnings per share. They estimate 3350 this year, growing to 57.83 in the next 5 years. So some pretty solid growth there. Okay, well into the double digits per year. And then the revenue growth 258 billion this year going to 583 over to well over 2x in the next seven years. So well over 10% a year there. Now, what do we have? We have some numbers. We have a little bit of a story. Now, it's time to put it in our stock analyzer tool and see what are our next steps here for Meta. Should we do more research? Because if we run our stock analyzer and the stock price is really close to number or the stock is currently selling for less than we think it's worth, go do more research. But if it's far away from it, let's say for example, stock analyzer says, "Oh, Meta is worth 50 bucks." Why would you spend any more time on it? Don't be like those other people out there where you fall in love with the story. The numbers have to make sense because a great story becomes a bad investment if you pay the wrong price. So guys, the other thing I want to remind you of when Meta was in a freef fall in 2002, the big concern was Metaverse. And if you go look at our videos, I was a buyer during 2002. I even got lucky and bought it on the lowest day possible of $88 a share as one of my purchases. But people were all concerned about the metaverse and I said, "Listen, if it fails, they're going to save 10 or 12 billion a year in free cash flow. it's going to be fine. But the story was attached to this metaverse being a failure and people not understanding the numbers. Is the same thing happening with AI. Can they just stop it when that money if it doesn't work out and go back to free cash crash? They could, but still a lot of money wasted. So I did a 10-year analysis. First thing, what are my revenue growth assumptions for the next 10 years? I did seven, 10, and 14%. Next, what's my profit and free cash flow margin? Well, even going back there, their free cash flow is a little bit lower than profit margin. So, I did 29,31 and 33 for for profit margin and free cash flow 28,30 and 32. But remember again, they've done basically 32% a year for the last 10 years. So, I might be a little low on these. Next, what is the PE and price of free cash flow I would assign to this company 10 years from now? Well guys, for all the companies out there, I sit there and think, okay, the market average over long periods of times is like 15 or 16 times. But if this is a good company with high returns on capital and a moat, I should pay a higher price, a higher premium here. If it's a worse company, declining revenue, doesn't have any advantage, I would go lower than 15 or 16. So here for Meta, I put an 18, 22, and 26. And then finally, my 9% no margin of safety intrinsic value return. This is not actually the return that I want. What it is is what's the company worth to to the market. And I look at 9 or 10% as the market average return. So that's what I want to do. But remember guys, if you just want 9 or 10% return, you shouldn't be buying an individual company. Go buy a lowc cost ETF, dollar cost average, and never think about it. So you need to have a higher number than that. So I sit here, I hit the analyze button. The stock's currently at 661. I have a low price of 540 to 560, high price of 1,400 to 1450, middle price of basically 850. So guys, based on my middle assumptions above, if I pay today's price, if they happen to come, if everything comes to fruition, I'm going to make about a 12% return on my money. That's pretty solid. The question is, is that enough for you? The other question is, do you agree with my assumptions? If you agree with my assumptions, the next step for any company that comes up green is go do the next steps of research so you can sit there and feel comfortable in what you're buying. Next stock, Amazon. Everyone knows this online store, but the real engine of this business is AWS. The business that rents out computing power and acts as the backbone that a huge amount of AI runs on. Amazon is spending enormous sums on AI. And here's the interesting part. Regular investors have actually been selling it. Super investors on the other hand have bought it. People like Clarman, Aman, and many more. So, who's right? Well, let's break this down and see what the price says. So, the price of the company right now is $2.7 trillion. We go to our enterprise value. We have about $300 billion in net debt because the enterprise value is about three trillion. Guys, look at this. They're spending so much on capex. Look at that number. negative2.5 billion last year compared to their net income of $91 billion. Amazon gives zero about cash flow. And that's something that I missed on the company for a long time. They're only worried about the future and making life easier for you and everybody out there. They don't care about short-term profits and it has paid off tremendously for them. Now, where does it hurt them? Returns on invested capital. because it takes so long to get that money in, their returns look a lot lower. I'm not as worried about that for Amazon right now, even though that's a lot of capex to spend out there. It's a huge number. As you can tell here, look at their PE 30. Their 5-year PE is 61. Compare it to their negative price of free cash flow and their 5year price of free cash flow 437. Why? Merely because their free cash flow is so low. I'm not telling you to completely ignore it, but I'm looking at going the real story if you trust Amazon is their ability to reinvest into the future. Now, one thing I love about this business, gross margin of 51% and look at this profit margin growing 10-year average 6 and 1/2, 5 years, 7 12, 1 year, 12. Where is it going to go to? That's what's incredible. AWS is the biggest cloud computing business out there and the margins are absolutely ginormous, guys. Other great things about Amazon, huge company, still growing a lot. 21% a year revenue growth for the last 10, 12% for the last five, 12 for the last three. And yes, 27 billion in acquisitions, but that's 1% of their entire market cap all over the last 5 years. So about 0.2% per year, guys. They're not making acquisitions to grow. They are growing naturally and organically. Let's go check out our eight pillars here. A little bit uglier. a lot uglier. Guys, I don't even care. That's not the story here. For me, the numbers are going to look bad. And I love the fact that their revenue and net income is up. Everything else is just affected by their short-term spending on capbacks. That's just going to drive the everything nuts. I'm not worried about that so much. Analyst estimates. Now, here's what's interesting. Not as much as I would have thought. They only have profit growing from $9 to 1757 over the next seven years. That's actually less than 7%. Sorry, less than 10% per year. I would thought it'd be higher than that. That's less than 10% per year. But keep in mind, some analysts in 2031 have them at 22 bucks. And we don't have many analysts here in the future. So, somebody could be wrong along the way here. But look at this revenue growth. 840 billion doubling to 1.66 trillion over the next seven years. That's 10% a year in revenue growth according to analysts. So, a lot of potential there. And guys, remember, I'm teaching on YouTube to make sure you understand that when you buy a stock, you're buying a piece of a business. And you've got to understand what the business does and how it makes money. So, we go to our stock analyzer tool. First off, revenue growth. I did 4, 8, and 12%. Next, profit margin, I did 8, 12, and 16. I made this year's profit margin basically their average for the next 10 years. What PE will I assign to Amazon 10 years from now? Guys, this one's a doozy. I put 2023 and 26. I can understand higher because I don't know a single person out there who doesn't use Amazon and doesn't use them more and more as time goes on. It's an incredible, incredible business. And then finally, 9% no margin of safety desired return. I hit the analyze button. The stock is currently at 250. I have a low price of 107, high price of 485, and a middle price of about where it's at today. So, I'm not overly excited about this from my position. But, of course, you might know something different. I was originally wrong on Amazon. And the reason was I didn't understand their ability to reinvest their money and get high rates of return. That was always like, it's got to it's got to pay off at some point. It was just hard to see that money paying off. Finally, it came through. I missed it on Amazon, but that's why I never owned Amazon. So, this is why when you're sitting here and looking at investments, find the ones that make sense to you. Yes, you're going to miss out on the ones that don't make sense, but if you understand the ones that do make sense to you, you're going to do better in investing. Now, stock number three, Microsoft. This one is absolutely fascinating because unlike most of the others, regular investors are still actually buying Microsoft. It's pouring money into AI through its cloud business and its partnership with OpenAI. The business is fantastic, but a fantastic business and a fantastic price are two different things. So to does today's price levels leave you enough room? Let's find out. All right, so here we are at Microsoft. The price of the business is 2.9 trillion, enterprise value of 3.07. So it's roughly $200 billion in net debt. And they generated 73 billion in free cash flow last year and 67 billion a year for the last five years. But you guys, you ready for this one? Last year's net income was 125 billion. I remember when Microsoft was doing less than 125 billion in total revenue. It makes its PE currently 23 versus its price to free cash flow of 40. It pays a dividend which is rather high in terms of total dollars out about 1% $25 billion a year. great returns on capital. Obviously, the most recent one is lower because their free cash flow has been a little affected, but look at this profit margin growth. 33 34% a year for the last 10 years, 37% for the last five, almost 40% last year alone. Incredible business. A lot of potential here. Let's go look at the eight pillars. So guys, six checks, two X's. We've got very minor buyback of shares, but it's these two valuation metrics that always bother us, that always annoy us. But I love it when I see that because it to me it just says great business. I just need to wait for the right price. And I think that's the case with Microsoft. But it could be the right price today because if they can grow their profit a ton, the numbers that look like X's could actually still be check marks in the long run. So let's look at analyst estimates here. Look at this growth. faster than Amazon. $17 to $41 over the next seven years. That's over 10% per year. Not by a ton, but it's definitely over that. And revenue growth, 335 billion, over doubling to 760 over the next 10 years, next seven years, which is again over a 10% revenue growth per year. So, what do we do here? We go to our stock analyzer, guys. is I did 7 10 and 13% revenue growth for the next 10 years. I did 34 37 and 40% profit margin which again if they keep growing their profit like they have been this could be low. What PE? I actually assigned at the same PE as Amazon 20 23 and 26. But in fairness I do think I was a little low on Amazon. As absurd as that sounds I just think Amazon is so ingrained in our lives and Microsoft is as well. But you don't sit there and go immediately like, "Oh, what what what can I get at Microsoft?" But with Amazon, you do. That's the difference there. And then finally, my 9% no margin of safety return. I hit the analyze button. And guys, this is why it's interesting to a lot of people. A low price of 360, high price of 8.22, and a middle price of 550. Which means based on today's price of 390, you can expect about a 13.5% return. if my middle assumptions occur and not including the balance sheet. So again, this is something that is a great company with a great potential return if my assumptions end up being correct. Now, here's the odd one out. Google. Of all seven Mag 7 stocks, Google's the only one really being the market this year, up around 14% while the others lag behind. And yet, strangely, retail investors have been rotating out of Google. Everyone was sure that AI chatbots would kill Google search and so far that has not happened. So, is the one winner still worth the price? Let's run it. So, guys, we have a $4.3 trillion business price against a $4.4 trillion enterprise value. So, this one only has a hundred billion essentially of debt and they generated 64 billion in free cash flow last year. So, they can easily afford that. Guys, look at this profit number. net income of 160 billion bigger than Microsoft. So we have again high returns on capital and look at this growing profit margin 27 29 and 38 over the last 10 5 and 1 year that's incredible revenue growth 18 16 and 14 over the last 3 to 10 years they own the number one search in the world number two search in the world in YouTube this is a great company so let's check out the eight pillars here another one with the two X's but again if they can grow like crazy their profit this is not an X That's the great thing about being an investor, understanding that growth is the biggest driver of value. So, what do analysts think, guys? Look at this. Over doubling their profit from 1450 a share to 31 over the next 5 years. That's about a 15% growth rate per year. That's huge. And then revenue growing from 500 billion to crossing over the 1 trillion mark in the next seven years. So about 10% revenue growth per year for the next seven years according to analysts. So what do we do here? We go to our stock analyzer and we put our assumptions in. I did 7 9 and 13%. For the revenue growth I want to make note I put in 28 30 and 32% free cash flow and profit margin here but last year they did 38%. So it's something to keep in mind here going forward. Next PE exact same 20 23 and 26. seems to be my go-to for these big companies that are out there. And then finally, my 9% no margin of safety return. Boom. I have a low price of 240, high price of 530, middle price of 330. So guys, I will say if their profit margin can be closer to last year, this is wrong. It's going to be a higher number than this. That's where the that's where the art of investing comes. That's what makes it so difficult. So guys, before we dive into our next stock, which is Nvidia, I want to remind you, you cannot take our titles and thumbnails too literally. We are playing the YouTube game. We are never here to give a stock tip. We are here to teach you a process so that one day you can sleep better at night because you know how to value a stock, how to make good assumptions about its future, and understand the price you're paying. That is really important as we go forward. So stock number five is the very popular Nvidia. While the other six are spending that $700 billion is Nvidia is the company selling the shovels. A huge chunk of all of that AI spending flows straight into Nvidia's chips. That's exactly why retail investors have been piling in. But that's also the risk that's hiding in plain sight. What happens to Nvidia if all that spending slows down? Let's take a look. So, Nvidia's price tag 5.06 trillion. And guys, look at this. They have a lower enterprise value than market cap. That means they have more cash on hand than debt. Their cash can pay off all that debt. That's incredible. Incredible returns on capital. 4540% numbers. Guys, look at these profit margins. 52% a year for the last 10. 54 and a half for the last five. 63% last year. and their gross margin is almost at 75%. This company is printing money and their PE is falling now because of it. Now, even though they're not spending a ton like the other people are in terms of as a percentage of their net income, they made 160 billion last year and still generate 120 billion in free cash flow. So, they're still spending on capex. They still need to build out factories and things like that to build more chips, but it's not as big a hit as the other companies might be. Guys, look at these revenue growth rates. 48% a year for the last 10, 67% for the last five, 114% a year for the last three. I want to remind everybody, don't assume the future is going to look the same as the past. This is a $5 trillion company. The thought of it growing 47% a year for the next 10 years is very unlikely in my opinion. So, by the way, our community members have this as a buy right now. So, let's go to our eight pillars again. Six checks, two X's. Guys, no one's going to doubt that this company is an incredible business. There are questions Michael Bur's had about Nvidia being a little bit of a not a Ponzi scheme, but funding their own kind of growth by investing in companies and getting he's he does question the balance sheet of Nvidia. When a guy like that talks and he's the guy who's the one who read every single look at all the credit scores of every single person in these in these mortgages, you got to at least pay attention. not flippantly say, "Oh, he's he's predicted 40 of the last three bare markets." Don't be stupid like that and saying it. I think it's a cute saying, but Michael Bur is a very smart investor. So, do pay attention and take heed of his warnings and make sure you understand what he's saying. So, let's go to our analyst estimates here because analysts think this thing is going to go from $470 a share to $20 a share in profit over the next 5 years. Guys, that's like what is that freaking 60% a year or something absurd. It's an absurd number. And revenue growth, it's going to 5x from 213 billion to a trillion dollars in the next four five years. So this is what makes stock analyzer hard, guys. Do I feel comfortable assuming that kind of growth for any company, especially a $5 trillion one that already does $20 some billion in revenue? I'm not going to lie to you. I don't. So here are my assumptions, being a little a lot more conservative. And you might sit there and say, "Well, I'm missing out." I might be and I'm okay with that because I think it's hard to justify underwriting a company that large on that kind of growth rate. If it was a $500 million company that had some patent on something that had future potential that was incredible, I'd say more power to them. But we've already seen that a lot of other chip companies can enter this market that's likely to drive down profit margin and growth. So, I still did 10, 15, and 25% revenue go through the next 10 years, which is still a lot, guys. I don't want to dismiss that. Profit margin 35, 45, and 55%. PE 10 years from now, I went higher just to show people out there, I'm going to give them a premium 20, 24, and 28. And finally, I'm going to do a 9% desired return for my no margin of safety. Before I show you Nvidia's results, I want to pause for a second cuz you've been watching this video for a while now. And you've seen me run stock after stock through our initial process. I want you to think about what just happened. The whole world is panicking at these companies. Regular investors are dumping them at the fastest pace in four years. People went from calling them the Magnificent 7 to the Lag 7 in a matter of months. And when that narrative flips that fast, most people do one of two things. They either panic sell, they lock in their losses, or they freeze and do nothing while the opportunity walks right past them. But you just watch what happens when you ignore the noise and run the actual numbers. Some of these stocks told a very different story than the headlines. That's the point of investing. The market in the short runs on emotion. Your decisions don't have to. That process that you've been watching, the eight pillars, the stock analyzer, the assumptions, the intrinsic value, that's not something I only pull out for YouTube, that's what our Everything Money members use every single day on any stock they want. They run their whole portfolio through it. They find things before the crowd does. They know what they own and why they own it. And when everyone else is running scared and running for the exits, they're calmly looking at the numbers and deciding for themselves, what is my next move? That clarity, knowing what something is actually worth before you put a dollar or a minute of your time into it changes everything about how you invest and more importantly how you sleep at night. So, if you've been watching thinking, I wish I could do that myself, guys, you absolutely can. There's a reason why we have thousands of investors in our community that do it every single day. So, do yourself a favor. Go to everythingmoney.com. Ask yourself what this is worth to you because I assure you that our 7-day trial for $7 is worth well more to you to have that kind of peace of mind in the tools. Run every single stock you want tonight yourself. $7 for 7 days and you'll never invest without a process again. Now, let's see what Nvidia looks like. I hit the analyze button. Oh, I'm actually shocked by this. 114 on the low side, 738 on the high side, 250 in the middle. But remember, I still assumed a 15% growth rate, but went a little bit lower on my profit margin. Number six is Apple. Apple's story is actually a little bit different from the others. It's not the one spending wildly on AI, and it's been lagging for its own reasons like slower growth and ongoing questions about their sales in China. It's an incredible company, but say it with me, a great company and a great investment are not the same things. A great company becomes a bad investment if you pay the wrong price. It always always comes back to the price you're paying for the value you're getting. So $4.7 trillion price, $4.9 trillion enterprise value. So essentially $200 billion in debt. They generated $130 billion in free cash flow last year. Guys, look at this. 122 billion in income. So they have more free cash flow than income because they're not playing that AI game. But even with that, they're at 36 times free cash flow and 38 times earnings. Guys, I remember 12 or 13 years ago, a friend of mine who was a huge Apple guy. He was blindly Apple. He asked me, "Paul, is Apple a value play?" And I said, "Listen, it's selling for like 9 or 10 times earnings? I think it's a value play. The question is, will the iPhone and iPad stay dominant forever?" That was my big question. Because in 2012 or 2013, that was a new product. It' only been around for a few years. To sit there and say it was going to dominate for so long, that was not clear as could be. So returns on capital 50 plus%. Incredible profit margin getting better every year. Why? They're increasing their subs their subscriptionbased business which is a very high margin business. And we see that in their gross profit. Their gross profit I believe used to be oh actually we can look it up. Look at this gross profit. It was below 40% for a long time. Then they started doing more subscription stuff. This is going to be a great money maker for them, which is why you also see their profit margins going up as well and such high free cash flow. Let's go to the eight pillars. Let me guess, six checks, 2x's pretty much like all the others except for Amazon. And let's go to our analyst estimates, guys. Doubling their profit from $9 to $1850 over the next 5 years. Again, about 15% growth per year. and their revenue growth. Not quite doubling, but it shows you how their profit margins can get better. 486 to 740 over the next 5 years. So, not as sexy. What is that? 7 or 8% a year, roughly 9%. So, let's go to our stock analyzer tool and look at my assumptions here. So, guys, I did 4, 7, and 13% revenue growth. I made a little bit of a jump here, bigger jump than before. Profit margin, I did 26, 27, and 28. and their free cash flow has actually been higher over the last one, five, and ten years. But the question I have is, am I being too low here because of their gross margin getting better and better and their profit margin going up with it? Next, what PE would I sign to this company, guys? I'm going to go 21, 23, and 25. So, I'm not going to give it as much upside, but I'm going to give it um a better base because I look at Apple and I think there's a great statement that Buffett and Munger made about Apple. If you give somebody the option of getting rid of their car for a year or or their phone, they're going to pick getting rid of their car. And I think that was great. I'm paraphrasing that. But I do my 9% desired return. I hit the analyze button. The stock's currently at 317. I have a low price of 160, high price of 400, and a middle price of 230. So for me, at these prices, it feels a little too high. You're only getting about a 5% return if my middle assumptions turn out to be true. And last but not least, Tesla. Guys, remember, I want you to remember this. Tesla is currently a car company. Even if they merge with SpaceX right now, their revenue would be over 70% still cars. Now, Tesla is its own animal. Its price often has far more to do with the story and the dream than the actual numbers of cars it sells today. So, let's strip away all the hype and look honestly at what you're really paying for right now. And by the way, to anybody who has a light has a sticker on their Tesla that says, "I bought Tesla. I bought this car before Elon went crazy," go f yourself. You're an idiot. You just didn't want to believe he was crazy. He's been the same person for 30 years that he is today. Maybe a little bit crazier, but money just magnifies. It doesn't change the person. You're just mad cuz you thought he was the save the world hippie and he was not. So that's my opinion about it. Tesla $1.4 trillion market cap. The stock has been on a tear lately. And guys, for a car company, no debt. That's incredible. So, I will give them credit on that one. But look at this gross profit. 19%. You know what that screams? Car company. Look at all the software businesses we just went through. Did anybody see a 19% gross profit? No, you did not. Now, with that said, the 5-year profit margin at 10% is also not a car company. So, they do things a little bit better, which I like a lot. But last year's profit is down. They recently just beat on deliveries which shocked everybody which was awesome. Um return on capital the last 5 years of 12%. But last year last last year was not the best. They generated $7 billion in free cash flow which is 200 times their free cash flow guys. 200 times. And their cash flow is up. Their net income I mean their PE is 360. This one's a crazy one. Look at this. We talked about this years ago. We said, "Guys, companies slow down all the time." 37% revenue growth for the last 10 years, 22% for the last five, four and a half for the last three. But he might be able to turn things around. Let's go to the eight pillars. All right. Apart from I don't even care about this. Shares outstanding are up 2%. Basically, I look at this like the other companies, just really expensive on the price of free cash flow and PE. Now, if God came down right now and said, "Paul, Tesla is going to double its free cash flow. It's going to start at seven billion and it's going to double every year for the next 30. This is cheap. Even for the next 20, this is cheap. Even the next 15, it's super cheap." But the question is, at what point does it become expensive? That's the art of investing. So, let's go take a look at our analyst estimates. Well, look at this. $2 per share growing to $24. That's 12x over the next 7 years, guys. That's an absurd profit growth level. And look at their revenue growth from a h 100red billion. Analysts believe $830 billion. Guys, I think they're still buying into that hype of the robo, the robots, and the taxis. And it could work out well, but if it doesn't work out well, what does Tesla end up being? So, we go to our stock analyzer tool. Now, I did a 10-ear analysis. I gave a lot of assumptions here. I did 10, 20, and 30% revenue growth for the next 10 years. I did eight, 11, and 14% profit margin. Guys, I'm going to go higher for sake of this video. I'm going to go 12, 18, and 24. That's a lot, especially for a company. So, I'm So, I want you guys to see something. This these first three lines is not what I believe. I'm sitting here trying to show Tesla might still be expensive. Next, what PE do I sign to the company 10 years from now? 18, 20, and 22? No, let's go 18,22 and 26. Let's be crazy. And then finally, my 9% no margin of safety return, guys. The stock's currently at $400 per share. I hit the analyze button. I have a low price of 100, high price of 1160, middle price of 360. And you guys saw me put much higher assumptions than I felt comfortable for going into this. Now, if you thought this video was interesting, wait until you see what I did next. I handpicked seven of my own stocks that I believe will beat the Mag 7 over the next 10 years. And honestly, you're going to want to see these results cuz we do believe we're going to vastly outperform over the next 10 years. So, check out who made the list by clicking on the video on your screen right now. Thank you for your time.