Big Tech Stocks Have Never Looked Cheaper. Is the Magnificent Seven a Screaming Buy?

Big Tech's hyperscalers sold off hard after disappointing earnings, pushing the Nasdaq toward correction territory. The names in the crosshairs: Alphabet (GOOGL, GOOG), Amazon (AMZN), Microsoft (MSFT), and Meta (META).

The sell-off centers on investor anxiety over massive AI infrastructure spending. The bull case, as laid out in The Motley Fool's argument, rests on three points: these companies are reporting record profits, trading at valuations similar to the S&P 500, and still growing much faster than the broader index.

The article also points to strong revenue growth and profitable cloud businesses as support for the group, framing the pullback as a discount on firms well positioned in AI.

Interpretation: if the valuation gap with the S&P 500 has effectively closed while growth rates remain superior, the market is pricing the spending as a threat to returns rather than as an investment in them. That makes capex scrutiny, not earnings quality, the swing factor for the group. The Motley Fool's call is a bullish read on that tension, not a guarantee the multiple compression is finished.

Note that the Nasdaq sits near correction territory, a threshold that often triggers mechanical selling and sentiment shifts. These four names carry heavy index weight, so their direction will likely steer the broader tape.