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Guys, 2025 has been an absolutely brutal year for most people based on price. The Magnificent 7, those high-flying tech stocks that everyone loved that drove the market, have plummeted. So you might be wondering, where is the real opportunity right now? There's a bull market somewhere.
The start of this year, I built my own personal Magnificent 7, and you know what? They're absolutely crushing it right now. And today, I'm going to do a deeper dive into three of those stocks that could very well be the next big winners in this market. Let's break them down one by one.
Stock number one is Nike. And guys, what do I love about Nike? The feeling of Google back in 2022. Google's done. CEO needs to be fired. They screwed things up. We need to get rid of this company. Search is dead. Okay, Nike is the undisputed king of athletic wear. They own over 25% of the global market, and their brand alone is worth $50 billion. Why? Because they've mastered brand loyalty, innovation, and they have cutting out the middleman as we speak. Their direct-to-consumer strategy now makes up 42% of revenue, meaning they're making more per sale. Direct-to-consumer margins are 55 to 60% compared to wholesale 40%. That's a big deal. And growth: sneakers app, Nike.com booming, while China, India, and Latin America are massive opportunities as those areas get wealthier and wealthier. They're also going after women's activewear, a market dominated by Lululemon, but Nike's scale does give them an edge.
Guys, let's not forget about Jordan Brand and sneaker hype. Limited drops keep demand high and margins very juicy. Plus, sustainability is a long-term play for Gen Z loyalty. Bottom line is $50 billion or more in revenue, strong cash flow, and a dominant brand. Nike set to bounce back after its fall in the last year. Let's take a look at the numbers now.
I want everybody to remember: go look at the videos made in the past when Nike was at this all-time high of 180. We were sitting there saying, "Ah, we're interested under 100." And we had comments, "Paul, Nike will never go under 100." Guys, we hear this in every single company we talk about. It'll never go to this price. Okay, that's just as bad as saying it'll never go up to a certain price on the high side. Guys, at the end of the day, people change their behaviors; they change their feelings about companies. This happens on every single company. It's impossible for a company to be popular forever. Nike is still a hundred billion dollar company with $15 billion enterprise value, 5.5 billion in free cash flow. Guys, look at this: the last five years, their average free cash flow is 4.75. Last year, they did 5.5. Still growth. Now, the revenues came out recently with a 9% year-over-year drop. Is that temporary? Is that permanent? That's a good question. Let me ask you a question: where do you see Nike in 10 or 20 years? If you truly believe the company's going under and the company's not going to be around in 10 or 20 years, avoid Nike like the plague.
I personally believe that news follows the stock price, and this stock has gone from 180 down to $65 a share. Was the low just on Friday? That, to me, says people have to find a reason why the stock is down. Go woke, go broke. People are buying other things; they don't care about Nike. There are all these other BS reasons. Guys, Nike is here to stay, in my opinion. Let's go look at the eight pillars and see what that says.
Oh, and by the way, this return on invested capital, for those of you who are new to the channel, this is moat status. When you get high returns on the money you invest in your business, it means you don't have to spend a lot to increase your profit, and it shows kind of a moat status. Are there companies with higher returns on capital? Yes, but I believe this is actually higher than Microsoft. Let's continue going here. Eight pillars, eight-pillar thriller. Remember, you don't buy a stock just because the eight pillars are all checks. It tells a story. PE is 20, price of free cash flow is 21, buying back shares, low debt, high returns on capital, revenue growth, net income growth, cash flow growth. This is what I love. Net income's only up 300 million on 8.2 billion in revenue, but cash flow is up over two billion since that happened. That's incredible. Let's go see what the analysts think. Analyst estimates almost doubling their earnings per share in the next four or five years, from 2.11 to $4. With, I mean, look at this jump. 44% drop this year and climbing back up again. Revenue growth 11% down this year, getting back to growth. And it's not going to be sexy growth, guys. They're a huge company, but they can still grow mid-single digits and do very well if you pay the right price, because our fourth tenant of our principal-driven investing: a great story can become a bad investment if you pay the wrong price; a bad story can be a great investment if you pay the right price. It goes that way as well.
Now, remember, we have a story; we have some numbers; we got to put them together. That's why we use our stock analyzer tool. This allows us to merge the numbers and the story together, use that story to determine the future revenue growth, profit margin, multiples, and your return to decide to show you what's the right price to pay for the company, excluding your balance sheet. So it always excludes the balance sheet, but this is really important. There's a reason why this tool was used over a million times last year by our users. There's a reason why I start every stock by doing this. I want to sit there and see: does it even make sense for me to spend more time on this? If I think the stock is worth 20 and it's selling for 500, I'm not going to spend any time on it. It's stupid to go understand a company where even my basic assumptions don't even make sense. So let's go see what I did for Nike most recently because we do this company a lot.
So guys, 10-year analysis. I did 3, 5, and 7% revenue growth. Profit margin, I did 10, 11, and 12. Remember, I still think this could go higher because of their direct-to-consumer growth. Their PE, it's a premium company with a premium return on capital. I gave it 20, 23, and 26 times earnings, and my desired return of 9%. Now, remember, 9% is the market average, 9 or 10%. This is to kind of get my intrinsic value. If you want to buy the company individually, you got to have a margin of safety because we're humans and we make mistakes, and the future's unknown. It's too hard to determine these things. You got to have a margin of safety. Your margin of safety will be based on your comfort with Nike. So I hit the analyze button. The stock's currently at 67. I have a low price of 60, high price of 118, middle price of 84. At the current middle price and middle assumptions, I'm looking at about a 12% discounted cash flow return. That includes your dividend, so don't add the dividend on top of this. So as this thing goes lower, it makes more sense for me to buy more shares if I like it. Now, remember, I currently own Nike, but you should never own any company because somebody like me or anybody, even Warren Buffett, owns the company. You're here to do your own research. We're here to teach you how to fish.
Company number two has been the big high-flyer: Alibaba. Alibaba, year to date, is up almost 60%. It's at 135, and guys, guess what? It was at 148 just last week. So it was even higher; it was up over 70% at one point. They're one of the biggest e-commerce and cloud players in China and the world. This is a cash-printing machine with a dominant market position: 50% e-commerce share, 35% cloud share, and a massive ecosystem that spans payments with Alipay, logistics, and even entertainment. They're basically Amazon, AWS, PayPal, and UPS all rolled into one. Now, where's the growth? International expansion, cloud computing, and AI-driven retail are huge tailwinds, and China itself is a huge tailwind. Yes, I know they're communist, and I've heard great investors say that 15, 20 years ago, but it's interesting now. I see a lot of great investors getting on the Alibaba bandwagon. Their moat is very wide. Scale, AI, and ecosystem lock-in make it tough for competitors to be able to take serious market share from them. Not, of course, immune to that, but I look at this and I sit there and say, "Okay, how does Alibaba get dethroned? Suddenly, it could very well happen, but this is a big company in a big market that's growing."
Now, the valuation: it appears to be insanely cheap to me. $130 billion in revenue, 70 billion in cash, low debt, and trading at what was 10 to 12 times earnings and now closer to 20, but versus Amazon's over 40 times. Are there risks? Of course, there are regulatory hurdles in China's economy, but long-term, where do I see China? If those, when those stabilize, I believe this is a no-brainer value play. Now, remember, it's currently at 135. Guys, we were doing videos when it was between 70 and 80, and remember, price changes everything. Price relative to value. If you love it at 70, should you automatically love it at 134? No. But the average retail investor loves it because it's gone up, but we're here to teach you the opposite. We're here to teach you that there's the right price to pay for everything. So let's continue on with with Alibaba here. Low returns on capital, which aren't the best, but things I love: 5-year free cash flow is $18 billion a year, while their 5-year net income is 13, so it's kind of skewed here. You're selling at 18 times 5-year free cash flow. They are paying out some dividends, but more importantly, guys, let me show you what I really love about this company: the company's buying back shares, and they keep announcing more. So whenever I hear people worry about reporting bad reporting, fake numbers, I go, "Okay, so they're reporting fake numbers, right?" Yes. So why would they report fake bad numbers if that's what made people say, "Hey, we hate this company"? Why would they report? But they would report crushing numbers, and then would they spend their cash to go buy back those shares? It could be the ultimate con. Very well could be, but I look at this saying, okay, doesn't seem likely to be the case. So again, there's a lot of positives here, but like everything, nothing's perfect. There are a lot of negatives here. China still is a little scary in the short run. We've got geopolitical issues; we got an economy that's kind of slowing down, but remember, their slowdown is still what, still growth. But look at the average income per person in China: it is growing drastically. Back in 2000, the average person in China made $959 a year. 2023, it was 12,500. That's 12 and a half times more that we didn't see that in the US. Yes, they were more communist back then than they are today, and I'm thinking over time it'll become even more so because guess what? I have a little secret for you: get in close. Communists love money. China is the fastest-growing billionaire, millionaire, middle class; every sort of category, they're killing it. Let's go look at the analyst estimates. Not as rosy, but not many analysts doing this thing. 8, 8.39, 4, 12, 11, $111. So basically, even 12% growth. 12% growth. If this continues on, what would you pay for a company that's growing its EPS, earnings per share, by 12% per year? That's my question.
Now let's go to our stock analyzer tool and pull up our history, and the last time we did Ali Bizzle. 10-year analysis: 3, 6, 9% revenue growth—not a lot. Profit margin: 12, 15, 18. Free cash flow: 15, 18, 21, because their free cash flow in the 5 and 10-year periods were significantly higher than their net income. PE, I did 15, 17, and 19. Lower ROIC, still geopolitical things, etc. What you could do is put this to normal levels and increase your desired return for your margin of safety. Guys, right now you may be thinking that the market is giving investors a rare golden opportunity. Stocks are falling; fear has been on the rise, and some people are panicking, but this is exactly when smart investors step in and buy great companies at a discount. The problem is most people don't have the confidence or the process to do so. My question to you is: how confident are you in your investing decisions? Do you truly understand the companies you're buying? When I say you understand them, I don't care; you have to understand how iCloud's AI, cloud, all these other things are done. Can you see where the company is going? Can you, can you give a reasonable estimate of what they're going to make in the future, how they're going to grow? If you can, you probably understand it enough to make an assessment of its value, but you still need the right process and the right tools in place to do that, because if you're like me, which you probably are if you're this far in the video, you like to understand why you're doing something, not just be told, "Go do it."
Guys, back in the .com days, I was getting advice from everybody under the sun. I always tell a popular story about Global Crossing and my sister's boyfriend's father telling me to buy it. It went to zero. Other companies that are still around today lost 90% of their money. I didn't do my own research; I had no process; I had no community, no tools, nothing. I had no way of knowing how to value a company's future. It was painful. Losing money sucks, but it's a necessary lesson. If you don't know what you're doing, the market will kick the crap out of you, as it should. But that's exactly what led to me building Everything Money, this YouTube channel, this whole platform. I wanted to give you guys the same tools I used for myself and the strategy to invest with conviction, especially when the market is crashing. That's when true wealth is created. We're making a lot of changes on this website. These changes have been going on for a while, and they're finally happening on April 15th. So if you're serious about changing the way you invest, if you want to lock in your pricing tier forever, if you want to get all these tools before we split them off into separate packages, now's your time. This is going to help you sleep better at night, make better decisions, more importantly, be surrounded by the people who will make you a better investor, because if you're on your own little island, you got to be able to figure out a way to get help from others, so you get yourself better. That's the place to do it. So click on the link in the description below or go to everything.com/signup. Sign up today. $7 for 7 days. Sign up. I assure you, it'll be the best investing decision you make all year. For $1 per day, you can change your entire future of investing.
Hit the analyze button. The stock's currently at 135, and like I said, a low price of 100, 130, high price of 280 to 330, middle price of 175 to 210. Do you see why I was loving it when it was in the 70s and 80s? It was looking like an absolute no-brainer. Go look at our past videos. Absolutely incredible.
Now, guys, Southwest Airlines is a company that I feel has the most potential out of all my stocks. Doesn't mean it's going to be a home run, but if I had 30 companies like this, and you'll see the numbers in a short period of time, I would do it all day long. This is the: this airline actually knows how to run a business. Every airline in the world has gone bankrupt except for Southwest, basically. Legacy carriers burn cash like it's going out of style. Southwest sticks to a simple, profitable model: one aircraft type, a point-to-point network, and now to be changed though. No baggage or change fees. They're now charging for bags. Now, a lot of people have been upset about that, and I understand that, but Elliot Management, who came on board, wants to think things more profitable, and it's a big part of my thesis here. Financially, they're one of the best-run airlines out there. The only time they had losses in their history was during COVID. Their margins: 10 to 15%, and that's what's big here. They hedged their fuel properly, and guess what? They're still currently, in the last year and last 5 years, look at these margins. These are terrible. My entire thesis depends on this going back to normal. What's back to normal? Well, if you look at our stock analyzer tool, it's going to be lower than you think, but they were consistently doing 10 to 15%. Bottom line profit before COVID. They're adding planes, doing more flights, and those planes they're adding are more fuel-efficient. This isn't just an airline; it could very well be go back to being a well-oiled money-making machine, but it takes patience because this stock is basically at the levels it was during COVID. It's at 34.77 per share. Just to prove to you how little I watch my stocks, I actually thought it was at $28 a share. Literally looking at that right now, I go, "Oh, it's up 20% from what I thought." I don't care where my stock is at. I buy a good company, and I wait for them to initiate to have my thesis and to sit there and perform. All I know is this profit margin is not like them. I'm not looking at the last three years and saying something is different versus the previous 48 years. That's not the way I'm going to work. And guess what, guys? Let me show you what analysts think. They're expecting a $1.65 in profit this year to 4.65, almost tripling in the next three years. Again, they're analysts, and I'm not going to make a bet because a bunch of analysts say it, but I look at that saying huge, huge potential. So I'm going to show you how impressive the stock analyzer tool is for this company. And guys, this exactly why you need this. 10-year analysis: 2, 4, 6% revenue growth—that's very little. Profit margin: 4, 8, and 12. Remember, they were doing 10 to 15% before COVID. I did eight here in the middle; that's almost half of that. Free cash flow margin: same thing. PE and price of free cash flow, guys, I went 12, 14, 16. I did 12, 4, why? Because it's an airline. I said, "Okay, I'm going to go lower for the for the free cash flow margin, even though with their shitty ROIC in the last 5 years, their 10-year is still 7.67. I think you can justify almost a 20 PE for this company, if not more. They're the best-run airline." Hit the analyze button. Boom. Low price of 22, high price of 102, middle price of 55. And guys, they're being smart; they're buying back shares.
So guys, as I said earlier in this video, these are three of the seven stocks that I picked, my own personal Magnificent Seven to beat the current Magnificent Seven. So if you're serious about finding value in this market, you have to watch this video. I just picked those seven stocks, and no, they're not the hype stocks everyone else is changing. These are companies with solid and real fundamentals, good balance sheets, and the kind of long-term upside that gets value investors excited. So go check that out, learn why they have massive upside, and avoid the overpriced junk out there. Click on the next video on the screen.