3 Reasons Alphabet Is the Most Underrated "Magnificent Seven" Stock
Alphabet may be the market's most overlooked AI leader, offering investors a rare mix of rapid growth, bargain valuation, and valuable hidden assets that could reward patient shareholders.
Overview
The Magnificent Seven are the most scrutinized stocks on the market, so calling any of them underrated feels strange. Yet Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) fits the description. Even after posting 24% revenue growth and blistering cloud numbers, the market keeps treating it like a threatened ad company rather than the artificial intelligence powerhouse it has become. Here are three reasons it is the most underrated of the group.
Image source: Getty Images.
Start with the disconnect. Alphabet trades at roughly 17 times forward earnings, the lowest valuation in the entire Magnificent Seven, despite growing faster than most of them. In its most recent quarter, revenue climbed 24% to nearly $120 billion, operating income rose 30%, and Google Cloud revenue exploded 82%. It has also been the only member of the group to beat the market this year.
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Originally published at www.fool.com.