Which Magnificent 7 stock is a better buy?

With the artificial intelligence (AI) craze still going strong, companies that successfully joined the bandwagon and incorporated the budding technology are recording a boom, including those in the exclusive society of the so-called ‘Magnificent Seven.’

With this in mind, Finbold has set two major ‘Magnificent Seven’ stocks one against the other, measuring their characteristics, technical analysis (TA) indicators, and other aspects to see which might present a better investment for the time to come.

Specifically, Meta Platforms (NASDAQ: META), the world’s leading social media company that encompasses all the greats – Facebook, Instagram, WhatsApp, and Messenger – and can reach over 75% of the global population through its tools, is one of these two stocks.

Indeed, its massive outreach helps Meta’s central moneymaking business – its digital advertising sales, in which it also relies on AI to improve and more narrowly target ad impressions. Furthermore, Meta uses AI to break language barriers while simultaneously working on generative AI efforts.

According to Gil Luria, an analyst from D.A. Davidson, “Meta’s strategic positioning in AI Foundation Compute and Spatial Compute signals a forward-looking bet on the next wave of technological transformation, where scale, capital intensity, and platform control will define market leadership.”

As the stock market expert, who has assigned META stock a ‘buy’ score with a $600 price target (which would represent an increase of 12% from its price at the time of publication), explained, his company considers Meta Platforms a leader among the greats:

“We see META as a top pick within the mega-cap space, with a combination of emerging leadership in the most important future technology platforms and an attractive relative valuation.”

Currently, the price of Meta stock stands at $545.18, recording a 0.34% gain on the day, advancing 2.62% across the week, adding to the 3.50% increase in the past month, and the 57.43% growth year-to-date (YTD), as per data on September 19.

In terms of technical indicators, Meta stock crossed the Golden Cross in early 2024 and has maintained a bullish trend, presently trading well above its 50-day simple moving average (SMA), as well as its 200-day SMA, indicating a strong uptrend with good support.

Alphabet (GOOGL)

Meanwhile, Alphabet (NASDAQ: GOOGL), the parent company of Google and YouTube, is the dominating force in the sectors of digital advertising and Internet search, the fourth-largest publicly traded firm on Wall Street, and, with a nearly $2 trillion market capitalization, one of only six trillion-dollar-plus companies.

In Luria’s view, Alphabet is a ‘hold,’ with a $170 price target (a potential increase of about 7% from its price at press time), and its most significant challenge will be to retain its share of the market it has so far dominated in the world increasingly shifting toward AI-focused tools:

 “While the company has maintained an almost monopolistic grip on the global Search market for years, many would argue that this dominance is under siege with the introduction of AI-enhanced search and chatbots. The rise of models like OpenAI’s GPT, which has been tightly integrated into Microsoft’s ecosystem, highlights this vulnerability inside of Google that despite its leadership in AI research and its massive data advantage, the company has struggled over the years to translate these assets into competitive commercial products at the same pace as its competitors.”

Presently, the price of GOOGL stock amounts to $161.95, reflecting an increase of 0.24% in the last 24 hours and growing 2.76% across the past seven days, although recording a loss of 3.13% over the month while advancing 17.21% since the year’s turn.

As for its technical perspective, Alphabet stock is demonstrating a mild correction after a bullish trend earlier this year, its recent price slightly below the 50-day SMA and hinting at potential consolidation, although a downtrend towards support might continue in the lack of a reversal.

Which stock is better?

Clearly, Meta Platforms stock seems to be the better buying opportunity in the view of a renowned Wall Street analyst, but it also has a stronger technical outlook compared to Alphabet, with its price above the key SMAs and a positive relative strength index (RSI) signaling sustained bullish momentum.

That said, doing one’s own due diligence, researching the stocks, weighing the risks, and keeping up with any relevant news, is critical when investing substantial amounts of money in any asset, as trends in this sector can easily and suddenly change.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.