Markets have been broadening over the past few months, with other companies taking the lead over AI stocks and big-cap tech companies. While the Mag 7 may yet surprise markets with further gains in 2025, it’s time for investors to get selective.
While all Mag 7 companies benefit from AI, many are still garnering significant cash flows from other sources. That’s good news for investors, especially given the high profit margins many big-cap tech stocks have today.
For instance, Meta Platforms (META) is still best known for owning social media giants Facebook and Instagram. Eyeballs on pages translates into ads and ad revenues. And that’s a big cash flow business that could still keep shares climbing in 2025.
Meta grew earnings by 35% in 2024, and revenues rose by 19%. Improving earnings indicate further cost savings, and Meta’s 35% profit margin should translate into further profits in the quarters ahead.
Action to take: Investors may like Meta Platforms here, and can always keep the stock on a watch list to buy on a market pullback.
At current prices, Meta pays a modest 0.3% dividend, but just bumped its payout by a hefty 33%, and has ample cash flow for further big increases in the years ahead.
For traders, the May 2025 $700 calls, last trading for about $23.00, could see mid-double-digit returns from further upside in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.