GAFAM in our screener: the real scores of the 5 tech giants

2026-06-23 · By Lubin Danilo, founder of Lubin Investment

The five GAFAM giants show very different profiles in our screener. Alphabet stands out clearly with the highest score and a relatively less stretched valuation. Apple and Meta have high scores but prices far above our entry targets. Amazon and Microsoft show fundamental criteria that raise questions despite their notoriety.

• The GAFAM are not a homogeneous bloc: their scores in our screener vary widely.
• Alphabet stands out clearly among the five.
• Apple and Meta have high scores but prices far above our entry targets.
• Amazon and Microsoft show fundamental criteria that raise questions.
• Our screener evaluates quality and price separately: two distinct decisions.

Alphabet (GOOGL): the best of the five

Alphabet is the only one of the five GAFAM to achieve the maximum score in our screener. Its business model — dominant digital advertising, rapidly growing Google Cloud Platform, YouTube, Waymo, DeepMind — generates abundant free cash flow with high margins. We published a detailed analysis of Alphabet Q1 2026 on our blog. Alphabet is valued at a relatively moderate free cash flow multiple for a tech company of this quality. It is our first choice among the GAFAM according to our method.

Apple (AAPL): 23/25, but price far above target

Apple scores 23/25 in our screener. The failing criteria are two: sales growth (slowing to a low pace) and current valuation. The stock price ($297.01) is 54.4% above our entry target ($135.47). Apple remains an extraordinary cash machine: high FCF margins, massive share buybacks, highly defensive closed ecosystem. But growth is slowing and the price incorporates optimistic expectations that our method cannot validate at this level.

Meta Platforms (META): 22/25, heavy Metaverse investments

Meta scores 22/25. The failing criteria concern the conversion of earnings to cash, the cash collection delay, and valuation. The current price ($563.85) is 62.8% above our entry target ($209.98). The explanation is structural: Meta is massively reinvesting in its Metaverse projects (Reality Labs) and AI infrastructure (datacenters, GPUs). These investments weigh on the current GAAP free cash flow but could generate future returns. Our method evaluates current FCF: these bets are not yet visible in the numbers.

Amazon (AMZN) and Microsoft (MSFT): criteria that raise questions

Amazon scores 6/10 in our screener. Its apparent free cash flow is very high, but the price-to-free-cash-flow ratio comes out at 168.6 times. Our entry target is set at $30.90, or 86.7% below the current price. The explanation: Amazon's e-commerce absorbs colossal capital (logistics, AWS, Prime Video) that reduces the FCF actually available to shareholders. Microsoft scores 8/10. Its price-to-FCF ratio stands at 45.2 times, with an entry target at $144.30 (60.7% below the current price). The slowdown in earnings per share growth, high stock-based compensations, and massive AI-related capex weigh on our assessment.

The synthesis: GAFAM are not a bloc

The most common mistake is to treat the GAFAM as a homogeneous category. Our analysis shows they have very different profiles. Alphabet stands out clearly. Apple and Meta have high quality but prices far above our entry targets. Amazon and Microsoft have fundamental criteria that question the quality of actual free cash flow. Our method allows us to distinguish them precisely, without being influenced by the notoriety or size of the companies.

FAQ

Why is Alphabet the best GAFAM according to your method?

Alphabet combines a maximum score in our screener (financial quality, FCF, margins, buybacks) with a relatively less stretched valuation than the others. Its advertising model generates abundant FCF, and Google Cloud is accelerating. We published a full analysis of Alphabet Q1 2026 on our blog.

How can Amazon have such a low score despite its size?

Our screener evaluates the quality of real free cash flow available to shareholders, not size or revenue. Amazon reinvests massively in logistics, AWS, and technology: apparent FCF is high, but capex is colossal. The FCF return relative to the stock price comes out at a multiple of 168 times, which is difficult to justify under our method.

Is Apple in decline according to your analysis?

No. Apple remains an elite company: high FCF margins, defensive ecosystem, massive share buybacks. But its growth is slowing, and the current price incorporates expectations that our method cannot validate. This is not an absolute judgment on the quality of the company, but on the quality-to-price ratio today.

Are Meta's investments in Metaverse and AI a problem?

For our method, these investments weigh on current free cash flow without generating visible returns today. They may be justified long-term, but our method evaluates what is measurable now. That is why Meta loses criteria on earnings-to-cash conversion and valuation.

Does your method disadvantage companies that invest for the future?

Yes, by design. Our method evaluates current free cash flow and valuation relative to that FCF. Companies that reinvest massively (Amazon, Meta) have lower apparent FCF or higher multiples. This is a methodological choice: we prioritize the certainty of current cash over promises of future cash.

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About the author

Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I have analyzed stocks through their fundamentals for several years and invest my own money with this method. I codified it into a tool that judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).