Update: My Top Stock of 2025 and the Magnificent Seven Valuation Scorecard
The red you see today is not Santa's coat... Also, my take on the Mag 7 stocks.
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The "Reverse Santa Rally" is in full effect this New Year’s Eve. All major indexes are trading in the red, with roughly 58% of stocks trending lower as we close out 2025. On this final trading day, price action has little to do with fundamentals or technical setups; instead, we are seeing the results of random, volatile, and thin-volume positioning as investors realign for the year ahead.
A Banner Year for Xeris
My top stock pick for 2025 was Xeris Biopharma (XERS) . While it is off the absolute highs seen after its strong third-quarter earnings report, the stock is surging today following a major competitive shift.
This morning, news broke that a primary competitor, Corcept Therapeutics (CORT) , received a Complete Response Letter (CRL) from the Food and Drug Administration. The agency stated that Corcept’s trials for its next-generation Cushing’s Syndrome drug, Relacorilant, did not provide sufficient evidence of effectiveness to warrant approval at this time.
The fallout was immediate: CORT shares have been sliced in half on the announcement.
This is a massive tailwind for Xeris. The Cushing’s market is a high-growth niche, and this regulatory delay for Corcept gives Xeris’s Recorlev a significantly clearer runway to capture market share. Xeris is already aggressively ramping up its sales force and recently reached its first-ever quarter of net profitability. With the stock currently trading at $8.12, it is up 137.4% for the year. I remain high on its long-term prospects and will be watching management's presentations at the upcoming biotech conferences closely.
The Magnificent Seven: A Three-Year Scorecard
Shifting to the mega-caps, the "Magnificent Seven" once again dictated market direction in 2025, though leadership has rotated significantly. Note the dramatic comeback for Alphabet (GOOGL) , which many investors had left for dead earlier this year.
Magnificent Seven Total Returns (2023–2025)
*As of 10:00 AM EST, Dec 31, 2025
Earlier this year, the narrative was that Google was losing the search war to AI. Alphabet turned the tables by establishing Gemini as a premier competitor and accelerating its own custom chip production. It now holds the group's momentum.
Valuation Check: The PEG Ratio
For growth-oriented names, the PEG ratio (Price/Earnings to Growth) remains my North Star. It helps us determine if a stock's premium is justified by its earnings trajectory.
Magnificent Seven PEG Ratios (Year-End 2025)
Nvidia (NVDA) remains the statistical anomaly. Despite its price, its PEG of 0.60 suggests it is actually the "cheapest" in the group. Because semiconductors have historically been viewed as cyclical, NVDA trades at a lower price-to-earnings than its growth would suggest. If this isn't a traditional cycle — and I suspect it isn't — NVDA is the best value in the lot.
In the "Middle Class" (PEG 1.6–1.7), Amazon (AMZN) is my preferred play for 2026. The market has priced this group identically, but I believe Amazon has the highest probability of outperforming its 16.6% growth estimate as AWS margins continue to expand.
Tesla (TSLA) remains an outlier with a PEG over 9. Its valuation isn't tied to current earnings but to "moonshots" like Optimus and Robotaxis. Meanwhile, the bears often attack Apple (AAPL) for its slow growth, but they overlook its incredible efficiency. A high Return on Equity (ROE) allows Apple to maintain its premium, even as a more "mature" growth play.
We will keep a close eye on this group as 2026 begins. I am currently long AMZN, GOOGL, and NVDA, though positions are small as I wait for the new year’s trend to establish itself.
At the time of publication, Rev Shark was long XERS, GOOGL, AMZN, NVDA.
