The artificial intelligence trade has broadened out beyond the " Magnificent Seven ," with power providers and companies in different parts of software and hardware stealing some thunder from the megacaps. But now the Mag 7 is starting to look mighty cheap following hyperscaler earnings last week that showed increasing returns on massive amounts of AI investment. Many traders and analysts are highlighting to start the week just how cheap the one-time high valuation group has become. For example, the forward price-to-earnings ratio for the Roundhill Mag 7 ETF is below 24, its lowest level since the ETF was created a little more than three years ago. Shares of the ETF were flat for the year through Friday's close, but earnings growth expectations have surged, lowering the forward valuation. The forward P/E is based on earnings estimates for the next 12 months. Forward P/E multiples for Amazon and Meta have fallen by more than a third, and Nvidia's has nearly halved from one year ago. Alphabet's is flat and Apple's is slightly more expensive. JPMorgan traders said they thought there might be a "catch-up trade" in the Mag 7 since recent earnings showed that capital spend is getting justified by returns on investment. "Mag7 / hyperscalers [were] under the microscope for capex spend and AI ROI and the cohort may be changing minds on AI ROI," JPMorgan traders wrote in a Monday note. "The group is trading more than two standard deviations below its mean from 2018 Q3 to Friday, on a forward P/E basis. This implies ~30% upside to just one standard deviation below its mean and ~56% upside to return to average valuation." ROI confidence could pave the way for another run The market appeared to be in agreement prior to the open on Monday. Semiconductors and hardware makers were mostly in the red while hyperscalers, software and telecoms were solidly in the green. "Hyperscalers combine attractive relative value … with meaningful optionality," Michael J. Wilson at Morgan Stanley wrote in a Monday note to clients. He qualified that he expects "dispersion among the hyperscalers going forward with ROI, balanced capex communication and quality key differentiating factors." Analysts at Yardeni Research concurred, noting in a Sunday brief that the recent selloff in the AI trade "represents a buying opportunity." Traders at Jefferies said Sunday that the momentum unwind over the past few weeks has started to show "signs of stabilization" following hedge fund deleveraging. Apple is an outlier Though some are pointing out Apple could be the exception, since it is the one Mag 7 stock that is significantly more expensive in terms of P/E than it was a year ago. Apple as received some investor love because it declined to undertake the AI investments of the hyperscaler. But Apple disappointed last week, with the Jefferies trading desk noting that Apple had its "worst EPS move in [more than] 12 years" following weaker third-quarter sales. "We continue to think AAPL is interesting on the short side," they wrote in a Sunday note. "[The numbers are] moving lower, stock's been a massive o/p, let's see what broader memory and tech tape brings next few weeks, but [it] has the building blocks of a laggard in the [near term] in our view."