Since Bank of America‘s Michael Hartnett coined the term “Magnificent Seven” in 2023, Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms (META +3.43%), and Tesla have all produced monster returns. At the time of this writing, four of the Magnificent Seven are each worth over $3 trillion. Less than four years ago, no U.S. company had a market capitalization over $3 trillion.

But it’s one of the smaller Magnificent Seven stocks that catches the limelight of this article.

After ranking Tesla last, Apple sixth, Amazon fifth, Alphabet fourth, and Nvidia third, here’s why Meta Platforms takes the silver as the second-best Magnificent Seven stock to buy for 2026.

Image source: Getty Images.

A value investor’s dream growth stock

It would take a big push in December, but the S&P 500 could gain over 20% for the third consecutive year, which hasn’t been done since the late 1990s. Valuation is likely top of mind for many investors heading into the new year.

The S&P 500 is relatively expensive, largely due to half of the index’s value being concentrated in just 20 companies — many of which are growth stocks. However, artificial intelligence (AI) is a game-changer, accelerating growth for many tech companies and improving efficiencies across the economy. So in many ways, the market deserves to be somewhat expensive.

Still, growth stocks that are priced for perfection could undergo brutal drawdowns if uncertainty captures market sentiment. Meta Platforms’ greatest advantage over the other Magnificent Seven stocks is that it is not priced for perfection. Far from it.

Data by YCharts.

Based on forward earnings estimates, Meta Platforms is slightly more expensive than the S&P 500 (^GSPC +0.11%) and much less expensive than the rest of the Magnificent Seven.

Meta’s earnings are driven by advertising revenue from its Family of Apps — Instagram, Facebook, Messenger, and WhatsApp. Instagram has been instrumental in helping Meta remain a social media leader despite generational shifts away from Facebook and the rise of short-form video on TikTok.

Meta Platforms

Today’s Change

(3.43%) $21.93

Current Price

$661.53

Meta is packed with growth potential

Meta is investing heavily in AI to enhance its ad targeting, ad performance, AI-powered tools for advertisers, its content algorithm to boost user engagement, and its Llama large language model, which will power the Meta AI assistant. It is also losing billions each quarter on its Reality Labs division, which is investing in virtual reality, augmented reality, the metaverse, and AI.

Meta CEO and founder Mark Zuckerberg doesn’t seem to mind if AI is costly. In September, Zuckerberg said it would be unfortunate if Meta misspent a couple of hundred billion dollars, but that the opportunity cost of missing AI prospects altogether is a greater risk.

To Zuckerberg’s credit, Meta can afford to take risks on AI without damaging its investment thesis. It is funding its needs with cash flow from its Family of Apps — not debt. In fact, it spent over $30 billion on buybacks and dividends in the nine months ended Sept. 30.

A cash cow at a great value for 2026

Meta is one of my highest conviction buys for 2026 and beyond because its high-margin Family of Apps business should perform well even during a recession.

If there’s a prolonged downturn, Meta can always pull back on Reality Labs spending or stock buybacks with zero impact on the core Family of Apps business. Meta has arguably better growth potential than other Magnificent Seven names, even though it is far cheaper.

Stay tuned to find out why Microsoft is my favorite Magnificent Seven stock to buy in 2026 in my final ranking.