Remember when everyone was freaking out about the Magnificent 7 being overpriced? Yeah, about that. Turns out the market’s favorite tech darlings just had a little reality check, and now they’re looking like actual bargains. Wild, right?
Here’s the thing: Meta, Tesla, Amazon, Apple, Microsoft, Alphabet, and NVIDIA got absolutely hammered in the first few months of 2026. Their valuations went from “we’re printing money” to “wait, are we actually printing money?” But then something interesting happened. These companies reported earnings that absolutely crushed expectations—we’re talking a 13% beat rate, the biggest since Q3 2023. That’s the kind of performance that makes analysts sit up and pay attention.
Goldman Sachs’ John Flood recently laid out why he thinks these stocks are about to have a serious comeback this summer. And his reasoning is pretty solid: rising earnings plus falling stock prices equals valuations that actually make sense.
Let’s talk numbers. Alphabet is now trading at a P/E of 18, down from 28 a year ago. That’s not just a discount—that’s practically a fire sale for a company printing money in search advertising and cloud computing. Meta’s at 26, Amazon dropped to 33 (from a ridiculous 54), and even NVIDIA—still the priciest of the bunch—is at 45 instead of 72. These aren’t cheap stocks, but they’re not insane anymore.
The only outlier? Tesla. Of course it is. The stock’s P/E ratio jumped to 162, up from 50 a year ago. That’s what happens when your CEO becomes a political figure and your stock becomes a meme. But even Tesla’s fundamentals are solid if you can get past the noise.
What makes Flood’s case compelling is that these companies aren’t just riding on hype anymore. They’re actually less dependent on economic growth than most of the market, which means they can weather uncertainty better. Plus, mutual funds and hedge funds are still underweight on these names, which means there’s real money waiting on the sidelines to jump back in.
And then there’s July—historically a great month for corporate buybacks. When companies start buying back their own stock, it tends to create a nice tailwind for prices.
The bottom line? After getting absolutely demolished in the first part of the year, the Magnificent 7 are looking less like a bubble and more like a legitimate opportunity. Earnings are strong, valuations are reasonable (mostly), and there’s still room for money to flow back in.
Flood’s prediction: these stocks will outperform the broader market this summer. Whether that actually happens is anyone’s guess, but the setup looks pretty interesting. Just maybe don’t put your entire portfolio into Tesla.
