Investors are worried about Meta Platforms’ increased spending on data centers, AI, and Reality Labs, which may take time to pay off. However, the Family of Apps business is a cash cow that can cover these risks.

Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, and Tesla have seen tremendous growth. Meta Platforms is slightly more expensive than the S&P 500 but much cheaper compared to the Magnificent Seven.

Meta’s earnings come from its Family of Apps, led by Instagram. The company is heavily investing in AI and Reality Labs, despite incurring losses. CEO Mark Zuckerberg is willing to take risks on AI without compromising the investment thesis.

Meta is a top pick for 2026 due to its high-margin business and growth potential. It can weather economic downturns by adjusting spending in Reality Labs. Stay tuned for more on why Microsoft is a top stock to buy in 2026.

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Disclosure: Bank of America is an advertising partner of Motley Fool Money. The author has positions in Nvidia. The Motley Fool has positions in and recommends top tech stocks.

Read more at Nasdaq: Ranking the Best “Magnificent Seven” Stocks to Buy for 2026. Here’s My No. 2 Pick.