Only 3 Mag 7 Stocks Pass Peter Lynch's Favorite Valuation Test

Only 3 Mag 7 Stocks Pass Peter Lynch's Favorite Valuation Test - Tesla Isn't One of Them

Surbhi Jain

May 19, 2025

Peter Lynch didn't need AI to beat the market – just a sharp eye for growth at a reasonable price. His favorite valuation test, the PEG ratio (P/E divided by earnings growth), helps separate true growth stocks from overhyped duds.

Under 1.0? That's a bargain. Over 2.0? You're overpaying.

So how do the mighty Mag 7 -- Apple Inc (NASDAQ:AAPL) , Amazon.com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), Microsoft Corp (NASDAQ:MSFT), Meta Platform Inc (NASDAQ:META), Nvidia Corp (NASDAQ:NVDA) and Tesla Inc (NASDAQ:TSLA) – stack up?

Surprisingly, only three come close to making the cut. Amazon (PEG: 1.95) is borderline pricey, but its strong expected growth makes the valuation palatable. Nvidia (1.57) looks fairer than you'd expect, driven by breakneck earnings acceleration in the AI gold rush.

Read Also:

Alphabet (1.44) quietly shines as the most Lynch-friendly of the bunch. A sub-20 P/E paired with double-digit earnings growth makes Google's parent look like the sleeper value in Big Tech.

The others? Not so much.

Microsoft (2.42) and Meta (2.48) offer solid growth, but their valuations are stretching the definition of “reasonable.” Apple's PEG of 4.04 reflects slowing growth and a sky-high multiple – an iconic brand, but hardly a Lynchian deal.

And then there's Tesla, which flat-out breaks the model. With a PEG of 9.84, earnings are shrinking even as the stock trades at a triple-digit P/E. It's not just overvalued by Lynch's standards – it's in another galaxy.

Only Amazon, Nvidia and Alphabet come close to passing Lynch's favorite valuation test. The rest of the Mag 7? Still dominant, still rich -- and still priced like the future is already here.

Read Next:

Tesla Is 2025’s Biggest Mag 7 Bruise So Far, But Also The Only One Still In The Green

Photo: Shutterstock

Recommended

AI Infrastructure Predicted to Hit $356B - One Early Mover Is Building in the Right Place - Ad

Elon Musk Drops Stunning Bombshell? - Ad

Trump's Crypto Blueprint Unveils This Infrastructure Powerhouse - Ad

Ivanka Trump made an unexpected visit to the Philadelphia Eagles locker room on Friday. The visit seemed to be aimed at meeting cornerback Eli Ricks, who had previously complimented her.

Cathie Wood's Ark Invest Shuffles Portfolio: Trades Include Intuitive Machines, Oklo, And More

Cathie Wood-led Ark Invest made significant trades, selling shares of Block and Cameco Corp, and buying shares of BWX Technologies.

Trump Plotting New Lockdown?

Trump Plotting New Lockdown? - Ad

President Trump is plotting another lockdown. It's listed inside the White House's own documents: Federal Register notice 90 FR 4544 to be exact. And while the lockdown could start on THIS date just weeks from now... you've likely never heard a whisper about it.

Appeals court allows Trump’s anti-union order to take effect

WASHINGTON (AP) — An appeals court has cleared the way for President Donald Trump's executive order aimed at ending collective bargaining rights for hundreds of thousands of federal employees while a lawsuit plays out.

Cathie Wood Just Spent $8.4 Million On This Top Chip Stock (And It's Not NVIDIA)

Ark Invest acquired $8.4 million worth of TSMC shares on Tuesday, May 20, 2025, reflecting confidence in the company's future potential. Other key trades included selling UiPath and buying Nextdoor and Blade Air Mobility.

The Most Important "AI Stock" You've Never Heard Of

The Most Important "AI Stock" You've Never Heard Of - Ad

The AI revolution is moving faster than anyone expected. But what no one is talking about is the one company AI simply can't exist without. It may be the single most important AI investment, yet most people don't even know its name. For now. The moment Wall Street catches on, this $20 stock could explode.

FDA approves Novavax COVID-19 shot but with unusual restrictions

WASHINGTON (AP) — The Food and Drug Administration has issued a but with unusual restrictions.

Bitcoin Breaks $107,000, Ethereum Dips, Dogecoin Rallies As 'Greed' Sentiment Takes Over: Analyst Predicts BTC 'Primed' For A New All-Time High

Leading cryptocurrencies rallied sharply on Sunday as investors awaited new all-time highs for Bitcoin.

Advisor: Trump Could Trigger Greatest Windfall in U.S. History

Advisor: Trump Could Trigger Greatest Windfall in U.S. History - Ad

Trump's next move could cement his legacy--and trigger a historic wealth boom. Ex-presidential advisor Jim Rickards reveals how it could hand millions a shot at true financial freedom. Watch the urgent interview while it's still free.

House Republicans unveil Medicaid cuts that Democrats warn will leave millions without care

WASHINGTON (AP) — House Republicans have unveiled the cost-saving centerpiece of President Donald Trump's at least $880 billion in cuts largely to Medicaid to help cover the cost of $4.5 trillion in tax breaks.

US and Chinese officials meet in Geneva to discuss tariffs as the world looks for signs of hope

GENEVA (AP) — The U.S. treasury secretary and America’s top trade negotiator will meet with high-ranking Chinese officials this weekend to de-escalate a dispute that threatens to cut off trade between the world’s two biggest economies and to damage global commerce.

Elon's New Device Could Launch Biggest IPO of the Decade

Elon's New Device Could Launch Biggest IPO of the Decade - Ad

Elon Musk's new device is being called a "game-changer"-and even the White House is using this tech. Jeff Brown says it could launch Musk's next trillion-dollar company and make early investors rich. You can claim a stake now for as little as $500.

Archer Aviation (ACHR) Stock Soars On LA28 Olympics Deal, Strong Earnings

Archer Aviation shares have climbed this week following several positive company developments. These include its LA28 Olympics air taxi deal and strong first-quarter financial results.

Toll Brothers, D-Wave Quantum, Palo Alto Networks, Warby Parker, Tesla: Why These 5 Stocks Are On Investors' Radars Today

U.S. stock markets experienced a downturn today, with the Nasdaq dropping over 75 points or nearly 0.4% to 19,142.71.

Nvidia Is About to Shock the World: July 23rd

Nvidia Is About to Shock the World: July 23rd - Ad

Jeff Brown, the tech legend who picked shares of Nvidia in 2016 before they jumped by more than 22,000%, is warning everyone to... Mark this date on your calendar: July 23rd! That's when Nvidia could help send shares of this Elon Musk supplier skyrocketing higher.

Activist Investor Arkhouse Reconsiders Macy's Takeover Bid — Here's What Lies Ahead

The activist investor who previously proposed a $6.9 billion buyout offer for Macy's is reportedly considering a new takeover bid.

No Cargo Vessels En Route From China To California For First Time Since Pandemic

For the first time since the COVID pandemic, zero cargo ships are on their way from China to the two primary ports in California.

World Economic Forum: "Arguably the Most Exciting Human Discovery Since Fire"

World Economic Forum: "Arguably the Most Exciting Human Discovery Since Fire" - Ad

Sam Altman, Bill Gates, and Mark Zuckerberg are all investing vast sums of money into a radical technology. According to Bloomberg, this could become 10 times bigger than AI, quantum computing, electric vehicles, cryptocurrencies, and robotics combined. And one stock is at the center of it all.

Chuck Schumer Blasts Trump For Backing AI Chip Sales To Saudi Arabia, UAE: 'This Deal Could Very Well Be Dangerous'

Senator Chuck Schumer warned that Trump-backed AI chip deals with Saudi Arabia and the UAE could risk U.S. tech secrets falling into China's hands, undermining national security and export restrictions.

Trump's tariffs will test unity among allies at G7 finance ministers' summit

BANFF, Canada (AP) — Leading financial officials from the world's richest countries are gathering in a Canadian mountain resort this week for what may prove a contentious meeting in the wake of President Donald Trump's .

A Historic Gold Announcement Is About to Rock Wall Street

A Historic Gold Announcement Is About to Rock Wall Street - Ad

The greatest investor of all time is about to validate what Garrett Goggin has been saying for months: Gold is entering a once-in-a-generation mania. Front-running Buffett has never been more urgent - and four tiny miners could be your ticket to 100X gains.

Japan's economy shrinks as Trump's trade war hits exports and shakes confidence

TOKYO (AP) — The Japanese economy contracted at an annual rate of 0.7% in the first quarter, according to government data released Friday, as U.S. President hurt exports and dented consumer confidence.

US supercomputer named after Nobel laureate Jennifer Doudna to power AI and scientific research

BERKELEY, Calif. (AP) — A new supercomputer named after a winner of the Nobel Prize in chemistry will help power artificial intelligence technology and scientific discoveries from a perch in the hills above the University of California, Berkeley, federal officials said Thursday.

AI-Powered Cyber Stock Attacks the Real Threat - Human Error

AI-Powered Cyber Stock Attacks the Real Threat - Human Error - Ad

88% of breaches happen from human mistakes. This company's IC360 platform is using AI to stop them.

Donald Trump's Library of Congress fight is really about the separation of powers

WASHINGTON (AP) — It’s not really about the books.

Colombian 'UFO Sphere' Goes Viral — Experts Split On Whether It's Alien Artifact Or Elaborate Art Project

A mysterious sphere that fell in Colombia has gone viral, sparking UFO speculation, though experts remain divided on whether it's alien in origin or simply an elaborate human-made object.

A Better Hedge Than Gold?

A Better Hedge Than Gold? - Ad

While the whole world is piling into gold as a hedge... White House documents reveal Trump is betting big on a completely under-the-radar resource. This little-known resource is minting 1,600 millionaires every single day... And investors have a rare opportunity to take advantage before everyone else catches on.

UnitedHealth CEO, Other Insiders Buy Millions In Stock As It Sinks Over 23% In A Week: Move Gets 'Mixed' Reaction

As shares of UnitedHealth Group Inc. (NYSE: UNH) witness a steep decline, company insiders are stepping up to the plate with a series of insider buys, which analysts and experts say is "a strong signal."

Boeing, trying to emerge from one of company's most difficult eras, is having a pretty good week

WASHINGTON (AP) — Boeing has secured a pair of major orders in the Middle East during a by President Donald Trump.

Nvidia Just Committed $500B to AI Infrastructure - Here's the Quiet Ripple Effect

Nvidia Just Committed $500B to AI Infrastructure - Here's the Quiet Ripple Effect - Ad

The AI race isn't just about apps anymore - it's about infrastructure. NVIDIA's $500 billion announcement is a wake-up call: the real opportunity may lie in powering the future, not just coding it. One public company is already stepping in and has support from NVIDIA's inner circle.

Japan's Honda projects plummeting profits due to Trump's tariffs

TOKYO (AP) — Honda’s profit for the fiscal year through March slipped 24.5% from the previous year, as its vehicle sales in China dropped, and the Japanese automaker warned Tuesday that will worsen its earnings.

SpaceX launches another Starship mega rocket in latest demo after back-to-back explosions

After back-to-back , SpaceX launched its again on Tuesday evening in hopes of making it through the entire test flight and releasing a series of mock satellites.

The Next Big Thing in AI: Musk's Secret Supplier

The Next Big Thing in AI: Musk's Secret Supplier - Ad

Nvidia soared 500% in the first AI wave. Now, Elon Musk's xAI is igniting the second. With Trump's backing and policy shifts, xAI is poised to dominate generative AI. One small company behind its tech could explode in value-this may be your second chance to ride the AI boom.

The bond market is shaking Wall Street again, this time because of worries about tax cuts

NEW YORK (AP) — Wall Street’s quiet corner is making noise again.

Chuck Schumer Raises Concerns Over Trump And DOGE Impact On US Coast Guard After Mexican Ship Collides With Brooklyn Bridge: 'We Know They've Been Meddling'

Senator Schumer expressed concerns about Trump and DOGE's impact on USCG operations after a Mexican vessel collided with the Brooklyn Bridge, resulting in 2 deaths.

The Race to Build AI's Backbone Is On - One Company Is Already in Motion

The Race to Build AI's Backbone Is On - One Company Is Already in Motion - Ad

Forget apps - AI needs power. This public company is building GPU access, leasing infrastructure, and joining NVIDIA's VC Alliance. And it's still flying under the radar.

Wave of Crypto Kidnappings in France Raises Security Alarms, Possibly Impacting Presidential Race

France is witnessing a rising wave of kidnappings aimed at cryptocurrency entrepreneurs. The situation is not only damaging the country's reputation but is also becoming a political issue

iPhones, AI, And Alibaba: Why Apple's China Bet Alarms Donald Trump

Apple's AI partnership with Alibaba for Chinese iPhones faces U.S. backlash over national security and data-sharing concerns.

Nvidia's Ecosystem May Have Found a New Rising Star

Nvidia's Ecosystem May Have Found a New Rising Star - Ad

This tiny company is already generating revenue by delivering real compute-$20M+ in deals. With access to NVIDIA's partner network, they're not just watching the AI boom-they're powering it.

Dogecoin Car To Race In Indianapolis 500: How To Watch, Bet On Driver Devlin DeFrancesco

Millions of people around the world will watch the Indianapolis 500 race on Sunday, May 25. Cryptocurrency investors and fans, especially those who like Dogecoin (CRYPTO: DOGE) may have more reasons to tune into this year's race.

Trending Now

Shaq Rolls Up In A Cybertruck — Elon Musk Has This One-Word Response

In Spain, a homelessness crisis unfolds in Madrid's airport

Tight Chart. AI Defense. Undervalued Cybersecurity Setup. - Ad

Trump's big tax bill has passed the House. Here's what's inside it

Nvidia's Jensen Huang Doesn't Want You To Order A Shake At Denny's, 'Get A Coke' He Says

This Coin Could Surge Like Bitcoin Did Back in 2013... - Ad

Trump Takes Aim at Taylor Swift: 'No Longer Hot' — Slams 'Washed Up' Bruce Springsteen

SCHD: The Dividend ETF Turning Quiet Compounding Into Long-Term Wealth

The Cybersecurity Stock KNOWBE4 Wish It Had Bought - Ad

Michael Burry Makes Major Portfolio Shift, Holding Only One Asset He Deems 'Recession-Proof'

The iconic designs of Jony Ive

Biggest Dividend Payout in U.S. History: $1 Trillion up for Grabs! - Ad

Dogecoin Up 47% In One Month: How Much Higher Can It Go?

RFK Jr.'s MAHA report raises concerns about vaccines, American foods and prescription drugs

You Can Take a Stake in Elon's xAI Before June 1st... - Ad

Spain orders Airbnb to block 65,000 holiday rentals over rule violations

Donald Trump Offers To Visit Xi Jinping In Beijing, Calls US–China Ties 'Important' After Striking Temporary Trade Truce

Thinking Of Buying Gold? Consider This ... - Ad

Honda pulls back on EV strategy for now and will push hybrid sales

Poland's Tusk says Russian hackers attacked party websites before election

Next-Gen Cybersecurity Stock Trades at 0.2% of Its Peer - Ad

Asian shares slide and US futures and dollar drop after Wall Street's winning week

Can Apple's AI Tabletop Robot Snap Its Stock Slump?

The AI Market Could Hit $356B - This Firm Is Already Building - Ad

Mark Cuban Once Suggested Gay NBA Players Could Profit: 'If You're a Player Who Happens To Be Gay and Want To Be Incredibly Rich, Then You Should Come Out'

Foot Locker Stock Soars On Potential Dick's Sporting Goods Deal: Report

This Tiny Cyber Stock Is Already Live in Saudi, India, UAE - Ad

What we know and still don't know about a private plane's crash into a San Diego neighborhood

AST SpaceMobile Shares Are Facing Selling Pressure Today: What's Going On?

No.1 Opportunity for 2025 [Take Action Now!] - Ad

Elon Musk's Father Open to More Children Despite Age: 'I Wouldn't Think Twice About Having Another Child'

OnRe's Blockchain-Driven Yield Revolutionizes Reinsurance Market

1 Must-Buy Stock for Monday June 2nd - Ad

World trade chief says global free trade is in a 'crisis' while on visit to Japan

Elon Musk's Tesla Teases FSD Capabilities, Jeff Bezos-Backed Slate's 100,000 EV Orders Challenge Cybertruck Hype And More: This Week In Mobility

The Cross-Chain Giant Set for 1,000%+ Gains - Ad

As Elon Musk Secures Saudi Starlink Deal, Elizabeth Warren And Senate Democrats Demand Probe Into Possible Ethics Violations And Accuse Trump Administration Of Helping SpaceX Secure Foreign Deals

Core Integrates With Ceffu To Enable Direct Bitcoin Staking From Institutional Custody Accounts

Elon's Greatest Invention... Hidden in South Memphis? - Ad

Oklahoma inks deal with UAE company to build $4B aluminum smelting facility

Jensen Huang's Wealth Surges 37% Since 'Liberation Day' Lows As Nvidia Re-Enters $3 Trillion Market Cap Club On Saudi Chip Pact

Brace Yourself for Jeff Bezos' "Amazon Helios" - Ad

New salmonella outbreak tied to same Florida grower with tainted cucumbers last year

Morris Chang Saw Writing On The Wall 20 Years Ago For The Likes Of Intel And Samsung And Why They Would Never Be Able To Beat TSMC In Foundry Business

AI Infrastructure Predicted to Hit $356B - One Early Mover Is Building in the Right Place - Ad

Republicans look to get Trump's big bill back on track with rare Sunday committee session

Trump Said Qatar Gifted Him A $400 Million Jet, But Insiders Say The US Initiated The Deal

Elon Musk Drops Stunning Bombshell? - Ad

US investment firm Redbird agrees to buy Britain’s venerable Telegraph newspaper

Trump administration cancels $766 million Moderna contract to fight pandemic flu

Information, charts or examples are for illustration and educational purposes only and not for individualized investment management This message contains commercial elements, such as advertising. We only send these offers to those who have opted in to our newsletter. Past performance is not indicative of future results. For these reasons we strongly suggest trading in a DEMO/Simulated account. The information provided by us is for educational and informational purposes only. We make no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended and have not determined if the statements and opinions of the advertiser are accurate, correct or truthful. If you use, act upon or make decisions in reliance on information contained or any external source linked within it, you do so at your own peril and agree to hold us, our officers, directors, shareholders, affiliates and agents without fault.