From Nasdaq: 2024-05-04 12:47:00

Meta Platforms (NASDAQ: META) stock has had a rollercoaster year, initially up 40% before dropping 10% post-earnings. Despite concerns, Meta’s shift towards AI and Reality Labs could be profitable in the long run. Revenue is strong, operating margin improved, and the stock is cheaper now, making it an attractive investment opportunity.

Reality Labs, Meta’s AI division, saw revenue rise to $1 billion in Q4 but also had an operating loss of $4.6 billion. Recent guidance suggests increased spending on AI infrastructure. Although reminiscent of 2022, the potential for AI integration in various projects could prove beneficial for Meta’s future profitability.

Investors are wary of Meta’s AI investments repeating past mistakes. However, the company’s core ad business remains strong, with overall revenue up 27% in Q1. The stock drop presents a buying opportunity, with Meta’s forward PE ratio fairly priced and aligned with the S&P 500.

The Motley Fool advises caution before investing in Meta, citing other stock picks with potential for high returns. The Stock Advisor service has outperformed the S&P 500 since 2002, providing guidance on portfolio building and regular stock picks. It’s important to carefully consider investment choices and potential for long-term growth before diving into any stock.

Randi Zuckerberg, former Facebook director and sister to Meta CEO Mark Zuckerberg, is on The Motley Fool’s board of directors. The Motley Fool owns positions in Meta Platforms and recommends the stock. It’s essential to conduct thorough research and consult with financial experts before making any investment decisions.



Read more at Nasdaq: Here’s Why I’m Loading Up on Meta Platforms Stock