3 Reasons AI Could Make Meta a Generational Stock

Meta platforms ( NASDAQ:META ) stock has outperformed most of its Magnificent Seven companies over the past two years, now up more than 224%. Undoubtedly, the glorious recovery from these now distant 2022 lows is primarily due to its bold bets on artificial intelligence (AI) technology.

It’s not just the promise of AI that makes the Meta one of the best Magnificent Seven stocks it has for AI exposure, though. The company is already starting to monetize AI in significant ways. And with new AI-based offerings to come, perhaps Meta is the one that will emerge as one of the most prominent winners from the AI ​​boom, as it shows us that generative AI can, in fact, lead to substantial growth of earnings outside the wild world. of semiconductors.

Key points about this article

• Meta is investing heavily in AI with future profitability in mind.
• As the firm brings AI to new industries, its growth prospects may still be understated.
• If you are looking for action with huge potential, be sure to grab a free copy of ours brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

Indeed, playing so-called “pick and shovels” AI token actions was a great early way to profit from the AI ​​boom. Whether it’s too late to get in on that action remains to be seen. Nvidia (NASDAQ:NVDA) stock’s recent slide (down nearly 7% in the after-hours session) after its incredible 122% revenue surge suggests it’s time to look beyond just pickaxes and shovels for the types of companies that can use the most effective such actions. tools to unlock value and shake up earnings growth.

While it’s not entirely clear how various tech titans will use AI to unlock long-term economic gains, I think investors looking for early signs of where the industry might be headed should look at Meta. Here are three reasons why Meta could be the next-generation AI company to buy, own or monitor.

An AI advertising service could be big

Meta CEO Mark Zuckerberg believes artificial intelligence will “revolutionize” advertising services. Meta’s AI Advantage+ advertising tools have already changed the world of digital advertising as we know it. As AI tool intelligence improves, I expect ad performance to increase while the need for human interaction decreases. Undoubtedly, Meta seems to have efficiency and automation down with Advantage+.

Notably, the latest updates have included a number of new features to up the customization factor. More customization likely translates into better conversion, making it a must for businesses looking to stay ahead of the competition.

Indeed, Meta has done a fantastic job of integrating AI to improve the value of its ads. Perhaps Meta boasts some of the world’s best talent in AI applied to advertising. As we move from targeted ads to increasingly automated, AI-embedded, hyper-personalized ads, Meta still stands to gain.

The Metaverse struggled to take off. AI could give it a boost

Meta’s name further suggests that he sees the metaverse as one of the next big things in the tech world. Otherwise, it probably would have renamed itself by now to reflect its new AI focus. Meta is still eager to build new virtual worlds to entertain future generations looking beyond today’s traditional social media platforms. However, he had to lift his foot slightly off the pedal.

Meta recently pulled the plug on its augmented reality (AR) tool Meta Spark. Hundreds of millions have reportedly used the tool. As the firm looks to become more efficient with the metaverse’s spending as it plays the truly long game, such moves are to be expected. Indeed, Meta probably sees a better way to do things on the AR front. I suspect that an AI-based product could succeed Spark and other similar tools.

As for the metaverse’s breakout moment, we may still be a decade or two away from such efforts leading to some form of big payoff. If Meta can customize AI for the metaverse as well as it can for ads, maybe the metaverse boom could make it to the end of the decade.

Meta AI has more than a punch to beat ChatGPT

Finally, Meta is betting big on the future of its large language model LLaMA (LLM). The latest version, LLaMA 3.1, does quite well against heavy players like ChatGPT-4. Although still early days, Meta’s commitment to promoting its open-source LLM suggests it is in the “front pack” in this ongoing AI race.

While Meta may not be able to put a “Meta AI” button on the keyboard like Microsoft (NASDAQ:MSFT) has with Copilot, let’s not forget that its LLM is never too far from the average user. For many people connected to Instagram, Facebook, WhatsApp, or even the metaverse in its current state, quick and easy access to Meta AI will never be too far away.

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