Meta Platforms has seen a resurgence in business but faces potential challenges with increased AI spending

From NASDAQ: 2024-08-09 10:14:00

Meta Platforms (NASDAQ: META) has seen a resurgence in its business, with strong advertising revenue growth driving profits. However, increased spending on AI technology could affect its financials. The stock has seen a decline amid broader tech sector weakness and concerns of a recession, presenting a potential buying opportunity for investors.

Despite a weak overall market, Meta’s stock price remains at the low end of historical ranges with a forward PE ratio of 23. Increased spending on AI technology may impact earnings growth over the next year. With advertising revenue at risk in a recession, investors should consider the long-term potential of Meta Platforms before buying.

Investors debating whether to invest in Meta Platforms should consider potential risks and rewards. While the stock is not on the Motley Fool’s list of top picks, past recommendations like Nvidia saw massive returns. Stock Advisor provides a blueprint for success with regular updates and new stock picks, outperforming the S&P 500 since 2002.

Former Facebook director Randi Zuckerberg is associated with Meta Platforms. The company’s resurgence and AI investments present opportunities for growth, but investors should weigh the risks of a potential recession. Consider long-term potential and strategic investments in AI before investing in Meta Platforms.



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