Meta Platforms is an undervalued stock with potential to reach $2 trillion valuation with AI and Metaverse investments.

From Nasdaq: 2024-06-02 08:40:00

Nvidia’s stock has surged over 900% in the past 18 months to reach a market cap of $2.7 trillion, but another Magnificent Seven stock is seen as the best value, with potential to almost double its current value of $1.1 trillion. Meta Platforms’ big investments in AI research and product development have drawn ire but could pay off big, with the company expecting $35-$40 billion in capital expenditures this year.
Meta has benefited from AI investments, leading to 27% revenue growth last quarter. The core Facebook platform has seen a surge in younger users, a positive sign of Meta’s AI-fueled engagement investments working. Meta’s AI ambitions go beyond its platforms, with Llama models showing best-in-class performance, heralding the promise of monetization in the future.
In addition to AI ambitions, Meta is aggressively investing in Metaverse offerings, despite its Reality Labs Metaverse segment currently making very little revenue while losing billions each quarter. Valuing Meta’s core platform alone at a net earnings run rate of around $55 billion, the company may be on track to reach a $2 trillion valuation, positioning it as the best bet of the Mag Seven stocks today.



Read more at Nasdaq: This Undervalued Stock Could Join Nvidia in the $2 Trillion Club