Mark Cuban happens to be not only a great businessman, he’s also one who’s clearly at least attempting to be a driving force for good in the private U.S. healthcare sector. Cuban has discussed at length his plans for Cost Plus Drugs, a rather remarkable business he launched to try to take market share from pharmacy benefit managers (PBMs), which dominate a good chunk of the U.S. healthcare system. For more on that, I suggest reading about what he’s honing in on right now in terms of private long-term investments.
That said, Cuban has been outspoken about some of his other investments, including those he’s made in a range of publicly-traded companies. Here are three of Cuban’s most prominent picks I agree could provide excellent long-term value for patient investors.
Not all of us are billionaires like Mark Cuban, but these are picks I think make sense to consider as potential long-term holdings for those with an investing time horizon of more than five years.
Key Points in This Article:
These three stocks are all Magnificent Seven members with strong prospects.
AMZN, META and GOOG are all highly leveraged to the emerging AI revolution.
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Amazon (AMZN)
Interestingly, Mark Cuban has been critical of Amazon (NASDAQ:AMZN) in the past, noting the e-commerce giant remains the billionaire investor’s largest publicly-traded holding in his portfolio. He’s impressively stated in the past that his exact exposure to this company is around a billion dollars, but given the fact that Cuban doesn’t need to disclose his holdings or changes in his holdings via 13-F filings, it’s impossible to know for sure what his position size is at the moment.
Cuban’s previous bullish commentary around Amazon appears to be tied to Amazon’s dominance in its core sectors. From cloud computing to the e-commerce sector, Amazon has dominated nearly every market the company has actively engaged in, leading Cuban and others to view the company as a unicorn playing a foundational role in the future of the global economy. I can’t disagree with such a view, and it’s also been true for at least the past 15 years that size matters – investing in the companies not only with the capabilities and positioning to succeed (but the deep pockets) – has paid off handsomely.
Tariff concerns may certainly derail Cuban’s thesis on the company in the near-term. But over the long-term, this does look like a solid bet, and it’s a billion-dollar wager I’d expect will be worth a lot more a decade or two down the line (what I’d think would be Mr. Cuban’s investing time frame).
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is yet another Magnificent 7 stock Mark Cuban has talked about owning as a long-term AI beneficiary in a range of high growth markets.
Meta’s AI-driven growth and dominant position in the digital advertising market certainly make this stock appealing to many investors at first glance. And looking at the company’s core social media business, which is about as insulated from the competition as can be, there’s plenty of pricing power long-term Meta can use to support its margins and continue to grow its bottom line at an outsized rate. It’s that focus on efficiency, which CEO Mark Zuckerberg has increasingly hammered home, that should continue to provide share outperformance relative to the company’s peers.
With strong fundamentals, including revenue growth of 22% annually over the past two years (double the industry average), there’s a reason why META stock is currently trading at a premium multiple. It appears Cuban and other big named investors aren’t balking at such a multiple. Indeed, in this market, paying up for quality is a strategy that certainly makes sense to me.
Alphabet (GOOG)
Rounding out this list of mega-cap tech stocks Cuban has talked about owning, we get to one of the companies I think has the best valuation among the mega-cap tech names in the market right now. Alphabet (NASDAQ:GOOG) is among the original high-growth mega-cap tech stocks that’s sort of fallen out of favor of late, particularly among younger investors. There are good reasons for this, with the rise of AI and other innovative and disruptive technologies shifting demand away from more “rudimentary” search engines such as Google.
That said, Alphabet’s core Google search business is one that’s continued to provide extremely steady cash flow growth over time, and that cash flow growth has continued even in the age of AI. Thus, in the works of Mark Twain, it does indeed appear that the reports of Google’s death have been exaggerated.
Instead, Alphabet has emerged as a top player in AI, seeking to utilize artificial intelligence to a greater degree within the company’s core search and digital advertising business. If Alphabet is able to deliver more value to its clientele in providing better ad targeting and a superior ROI overall (and better margins for investors), this is a stock that could be worth buying on this recent dip.
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