Big Tech was the stand-out performer last year, as investors piled into the so-called "Magnificent Seven": Alphabet , Amazon , Apple , Meta , Microsoft , Nvidia and Tesla . While tech's potential — driven in large part by the hype around artificial intelligence — continues to put these stocks in the spotlight, one investment strategist says some lesser-known U.S. small caps are much more attractive plays right now.
"We're actually now starting to see values in the energy sector that we haven't seen for quite some time," he said, naming ExxonMobil and APA Corp as top picks. Morningstar gives stocks a rating of between one and five stars, with a top rating indicating that the shares are undervalued. It has a four-star rating on Exxon, given that it is trading at a 17% discount to fair value, has a dividend yield of 3.7%, and will resume its "very, very large" share buyback plan.
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These stocks are poised to lead tech beyond the ‘Magnificent Seven’Valuations are attractive in AI and software, tech-sector analyst says
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