So just under 9%. Significant, I suppose, for just 3 of 500 stocks.
EDIT: since "etc." was mentioned, I thought I'd toss in some of the other top stocks in the S&P500:
• Apple Inc. (AAPL) ~6.7 %
• Microsoft Corp. (MSFT). ~6.6 %
• NVIDIA Corp. (NVDA) ~6.0 %
Amazon.com Inc. (AMZN) ~3.8 %
Another 20% or so. So the above seven stocks comprise about 30% of the S&P500 (Apple, Microsoft and NVIDIA are the "Big 3" at about 20% when combined).
Not when compared to the likes of Tesla and Palantir. But once upon a time a P/E of 35 was insane. For meta I still feel like its too much. Apple.. Well less so.
The question is do you think you can get 35 years of this level of earnings out of a company. If yes or more then it makes sense. But a whole hell of a lot can happen in 35 years.
It's crazy to me that these companies are essentially holding up the stock market, but are hemorrhaging money on buying GPUs. The magnificent 7 have spent $560 billion of capital expenditures between 2024 and 2025 leading to $35 billion of revenue, and zero profit. It feels like a complete house of cards to me. No one has made any profit on AI.
High capital expenditure like this is viewed favorably. Investors are investing in AI, and high cap-ex is a strong signal that the companies are going after AI i.e. doing what investors want them to do.
It's only favorable, because there's no better alternative for the money. In a sense, interest rates are still low, for this risky of a bet to be the better alternative.
I assume you mean an S&P500 tied index fund?
I asked "a friend":
• Meta (META) ~3.1 %
• Alphabet (GOOGL + GOOG) ~3.8 %
• Tesla (TSLA) ~1.6 %
So just under 9%. Significant, I suppose, for just 3 of 500 stocks.
EDIT: since "etc." was mentioned, I thought I'd toss in some of the other top stocks in the S&P500:
• Apple Inc. (AAPL) ~6.7 %
• Microsoft Corp. (MSFT). ~6.6 %
• NVIDIA Corp. (NVDA) ~6.0 %
Amazon.com Inc. (AMZN) ~3.8 %
Another 20% or so. So the above seven stocks comprise about 30% of the S&P500 (Apple, Microsoft and NVIDIA are the "Big 3" at about 20% when combined).
Assume a market weighted index fund, not an equal weighted index fund.
Sure, the above was for Vanguard (VOO or VFIAX).
> I assume you mean an S&P500 tied index fund?
I would assume VT and/or BNDW. Most sane index fund fans aren’t all in on s&p 500.
On a P/E basis neither Meta nor Alphabet seem overvalued.
Not when compared to the likes of Tesla and Palantir. But once upon a time a P/E of 35 was insane. For meta I still feel like its too much. Apple.. Well less so.
The question is do you think you can get 35 years of this level of earnings out of a company. If yes or more then it makes sense. But a whole hell of a lot can happen in 35 years.
7 replies →
I think problem with both is that they get money from advertising. Once companies really have to start tightening belt that might largely go away...
It's crazy to me that these companies are essentially holding up the stock market, but are hemorrhaging money on buying GPUs. The magnificent 7 have spent $560 billion of capital expenditures between 2024 and 2025 leading to $35 billion of revenue, and zero profit. It feels like a complete house of cards to me. No one has made any profit on AI.
High capital expenditure like this is viewed favorably. Investors are investing in AI, and high cap-ex is a strong signal that the companies are going after AI i.e. doing what investors want them to do.
It's only favorable, because there's no better alternative for the money. In a sense, interest rates are still low, for this risky of a bet to be the better alternative.
1 reply →
Very interesting, thank you. I'm not in business so I don't have a good understanding of these expectations.