Quick Read – Alphabet trades at 16x earnings with 22% revenue growth and Meta at 20x with 33% growth.
Both are priced like cyclicals, not compounders. – Barclays projects hyperscaler capex hitting $1.2 trillion by 2028, giving chip stocks like NVIDIA 18 months of contracted earnings visibility. – The 10-year Treasury near its 76th percentile makes rate risk the one force that could deflate Big Tech’s compressed-multiple setup. – Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn’t make the cut
Grab the names FREE today. Venu Krishna went on CNBC’s Closing Bell Overtime on June 30 and argued that the money fleeing Big Tech is running the wrong direction. His pitch: a PEG ratio below 1 for the Mag 7 excluding Tesla, roughly 30% earnings growth in Q1, and multiples that have already been marked down. “Everybody, when they think about rotation, is moving away from them.
And those are precisely the areas which we continue to like.” Krishna’s team lifted its S&P 500 target to 7,800, built on 21% earnings growth this year decelerating to 15-16% next year, with multiples deliberately cut 5-10% across buckets. He is calling the Big Tech setup “fantastic” because you have earnings compounding fast while the multiple has taken a four-handle haircut. For chip stocks, he sees 18 months of earnings visibility from hyperscaler spending with “no sign of reducing,” projecting hyperscaler capex reaching $1.2 trillion in 2028, roughly $250 billion above consensus.