So the Magnificent Seven has been having a rough start to 2026, and honestly, that's created an interesting setup if you know where to look.

Nvidia and Meta are now trading cheaper than the broader S&P 500 when you look at forward earnings - and that's the metric that actually matters if you're thinking long-term. Most people still look at the trailing price-to-earnings ratio, which can make both stocks seem expensive. But here's the thing: the forward P/E ratio tells a different story because it factors in what analysts expect these companies to actually earn next year.

Nvidia's sitting at 22.1 forward P/E versus 23.6 for the S&P 500. Meta's similarly positioned. That's compelling when you think about what these companies are capable of.

Let's talk Nvidia first. The company just posted 65% revenue growth and nearly 60% EPS growth for the fiscal year ended in January. Yeah, the stock price has run up, but the earnings have actually kept pace. The real question is whether that growth rate is sustainable - and I think most of the market is pricing in the assumption that it isn't.

Here's where it gets interesting though. Yes, Nvidia's heavily dependent on a handful of hyperscalers for data center revenue, which is 90% of their business. That's a concentration risk. But if the company can diversify that customer base and expand into robotics and physical AI, the long-term runway is massive. Even if growth moderates to 20-30% annually, the price-to-earnings multiple you're paying right now wouldn't look crazy in hindsight.

Meta's a different animal entirely. While other hyperscalers are dumping money into data center infrastructure and hoping it pays off eventually, Meta is actually monetizing AI right now. They're using it to improve their apps, connect users with relevant content and ads, and power their Llama models. The family of apps is so profitable that they can afford to be aggressive with spending while still improving margins.

That's the real difference - Meta's an AI snowball. Investments compound. Better targeting drives higher-margin growth, which generates more cash flow for the next bet. When you look at the price-to-earnings valuation on forward earnings, Meta looks like a value play, but it's actually executing better than most people realize.

If you're trying to pick between the two, it comes down to your thesis. Nvidia if you think the infrastructure buildout is just getting started. Meta if you want to own a company that's already proving AI investments can drive real returns. Either way, both are worth considering at these levels - the cheaper they get, the better the risk-reward becomes.