In this article, we will take a detailed look at the 10 Latest AI News You Shouldn’t Miss.
Anastasia Amoroso, iCapital chief investment officer, said in a latest program on CNBC that 2025 will be the year of AI software, data centers and power. She believes the AI rally is broadening out.
“Artificial intelligence, as I mentioned, is carrying itself over into 2025, and I think it’s broadening. Last year, last two years, have been about semiconductors. I think this year has to be about AI software; it has to be about AI monetization, but it also has to be about AI power. And it’s not just, you know, a number of headlines talking about data centers and how much they consume, and the fact that I think you need eight times the electricity to run an AI data center. It’s an actual real trend, which I also think the Trump Administration is going to support as well.”
The analyst also said investors should consider alternative investments or private markets as she believes private equity valuations are below the levels seen in public markets.
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For this article we picked 10 AI stocks trending on latest news. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An array of news articles and video clips with the company logo.
10. Applovin Corp (NASDAQ:APP)
Number of Hedge Fund Investors: 51
Jim Cramer in a latest program on CNBC said Applovin Corp (NASDAQ:APP) is overvalued and warned investors to be cautious about the stock:
“I think this may be incredibly overvalued, and you can’t short it—there’s too many people betting against it. But this is mobile game ad placement, and I think anyone can come into this. I think there actually know people who are coming into it.
And it’s one of those stories, David, where they big margin. So you came in with anything smaller, you know, any lower price, you could obliterate them. Now, they would say, “Look, we are so entrenched.” I say, “Give me a break.”
I mean, I know that you do have earnings. They do have earnings—they could earned 350. But I just think a stock that started the year at a fraction of where it ended, at $39 to 323, is a stock that you ought to think twice about.”
Alta Fox Capital stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q3 2024 investor letter:
“Alta Fox has followed AppLovin Corporation (NASDAQ:APP) since its IPO in 2021, watching its initial high valuation (>30x EBITDA) through the mobile gaming downturn in 2022, failed Ironsource bid), and its consistent share gains from Unity/Ironsource. After years of diligence and consistent admiration for APP’s adtech revenues, we gained conviction in Applovin’s data-driven competitive advantage and initiated a position this summer.
We purchased shares at~11x NTM EBITDA, an attractive price relative to APP’s growth and quality compared to similar adtech peers. The entry price also appeared inexpensive relative to APP’s own historical valuation, which averaged -20x EBITDA. We felt confident in underwriting mid-teens revenue growth and modest operating leverage over the medium-term. Without any multiple expansion, we expected to earn a low-20%s IRR in the stock-an attractive return for owning such a dominant, secular growth business.
As the year progressed, the market increasingly rewarded APP for its quality & growth, nearly doubling its forward EBITDA multiple from our cost basis. With the valuation nearing 20x EBITDA, we no longer saw a sufficient margin of safety and exited our position at roughly 2x our cost basis.”
9. Snowflake Inc (NYSE:SNOW)
Number of Hedge Fund Investors: 71
Snowflake Inc (NYSE:SNOW) was among the leading artificial intelligence software stocks to watch in the year ahead, say analysts at Wedbush.
Snowflake Inc (NYSE:SNOW) is a Cloud-based data warehouse offering data storage and analytics services. Snowflake Inc (NYSE:SNOW)’s moat lies in its data technologies that let companies analyze and make sense of unstructured data. Amid the generative AI boom, companies are ready to spend a fortune to use huge datasets to their advantage. This would bode well for Snowflake Inc (NYSE:SNOW). The company’s usage-based pricing model also gives it an edge in the market. Snowflake Inc (NYSE:SNOW) expects the total addressable market for its Cloud data platform to rise to $342 billion by 2028, which is double the market size of 2023.
Baron Global Advantage Fund stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
8. Crowdstrike Holdings Inc (NASDAQ:CRWD)
Number of Hedge Fund Investors: 74
Adam Coons from Winthrop Capital recently said while talking to Schwab Network that he’s bullish on Crowdstrike Holdings Inc (NASDAQ:CRWD) because of AI.
“We looked at cybersecurity as a way to play the growth in AI but with a more measurable approach. When you consider something like Crowdstrike Holdings Inc (NASDAQ:CRWD), sure, valuations might be a bit hard to stomach. However, the growth potential and the clear necessity for a new generation of cybersecurity make Crowdstrike Holdings Inc (NASDAQ:CRWD) a leader in the space.
When you look at the adoption of Falcon, for example, within their product pipeline, it underscores that this is a market — and I know this is probably an overused phrase — but it’s definitely a pie that’s growing. It’s clear it will continue to grow because AI is only going to make cybersecurity more complex. From a business standpoint, that complexity increases billable opportunities at higher rates, which is why we like the space, particularly Crowdstrike Holdings Inc (NASDAQ:CRWD).”
Despite the tech outage incident, the fundamental story of Crowdstrike Holdings Inc (NASDAQ:CRWD) remains unchanged. Wedbush Securities last year estimated that less than 5% of CrowdStrike’s customers might switch providers, potentially impacting revenue by $150 million out of the projected $3 billion in sales for fiscal year 2024.
Fidelity Growth Strategies Fund stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“A non-benchmark stake in CrowdStrike Holdings, Inc. (NASDAQ:CRWD) (-40%) was the biggest detractor among individual stocks. The shares of this cybersecurity platform provider fell precipitously in July, after a glitch in a CrowdStrike software update led to a global outage for many of its customers that, among other impacts, caused the mass cancellation of flights around the world. After bottoming out in early August, the stock made a partial rebound by quarter end, but we exited the fund’s holding during the summer.”
7. Oracle Corp (NYSE:ORCL)
Number of Hedge Fund Investors: 91
Oracle Corp (NYSE:ORCL) was among the leading artificial intelligence software stocks to watch in the year ahead, say analysts at Wedbush.
Oracle Cloud Infrastructure (OCI) technology has been gaining traction after the company signed deals for the tech with major companies including Meta and Amazon. Oracle (ORCL) has been consistently signing deals with major AI players each quarter. In the second quarter, Oracle and Meta agreed to a partnership where Meta would gain access to Oracle Cloud Infrastructure (OCI) and the two companies would work together to develop AI agents using Meta’s Llama models.
OCI’s growing influence can be linked to the uniqueness of its data centers. Oracle’s data centers stand out because of their ability to automate operations. The racks used in these data centers and the functionality of the centers remain consistent, regardless of size or region. This automation and standardization make Oracle’s data centers more efficient, giving OCI a significant edge over its competitors.
Parnassus Value Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q3 2024 investor letter:
“Oracle Corporation (NYSE:ORCL) announced second-quarter results that exceeded consensus expectations, driven by growth in its cloud infrastructure business, which is benefiting from demand for AI applications. Investor sentiment was further bolstered by the company’s announcement of a new partnership with Amazon.”
6. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 99
Adam Coons from Winthrop Capital recently said while talking to Schwab Network that he’s been staying away from Tesla Inc (NASDAQ:TSLA) shares amid high expectations and valuation concerns:
“This is really a narrative trade right now, post-election. When you see the stock up, as I mentioned, over 50%, it was more than priced to perfection. So, having a miss like this, I’m surprised it’s not down more. But there’s enough momentum and narrative to support the stock right now.
I think it’s set up with really high expectations, which is why we’re staying away from it. Would I short the stock? Not at all. For us, we’ve stayed away and kept it out of our portfolios because of the level of volatility and uncertainty.
This is primarily a story about autonomous driving and the potential for a less stringent regulatory environment. However, I think that’s a tough case to make. Trump alone isn’t going to be able to make any significant moves here.”
Looking beyond the recent spike in Tesla shares amid Donald Trump’s victory, Tesla’s fundamentals are challenged. How? Tesla Inc’s (NASDAQ:TSLA) key robotaxi event was short on details. Notably absent was the discussion of a “more affordable” model that Musk had previously mentioned to boost confidence in Tesla’s vehicle sales growth outlook.
What about the $30,000 price tag claim?
Musk has indicated that the Cybercab will have a production cost of approximately $30,000. Operating within the robotaxi fleet is projected to cost around $0.20 per mile. With a production cost of $30,000, the retail price of the Cybercab is likely to exceed this figure. For instance, if the Cybercab is priced at $30,000 per unit, that translates to $15,000 per seat. In contrast, the average price per passenger seat in Tesla Inc (NASDAQ:TSLA)’s most affordable long-range RWD Model 3—factoring in full self-driving (FSD) licensing—is under $10,000 ($29,990 post-incentive vehicle price plus $8,000 for the FSD license, divided by four passenger seats). Regarding operational costs, while the Cybercab is expected to cost $0.20 per mile, charging the Model 3 is estimated at under $0.10 per mile, leaving a significant margin to cover maintenance and downtime.
There is a lot of hype around Tesla Inc (NASDAQ:TSLA) robo taxis but many believe they will not be enough to fix the company’s long-term challenges.
What are these challenges?
Tesla Inc’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. Even Rivian’s CEO suggested Tesla Inc (NASDAQ:TSLA) could be nearing market saturation for these models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
Delaware Ivy Core Equity Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q3 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) – Though it isn’t a holding within the portfolio, Tesla continues to be a cult-like stock with weak fundamentals dependent on highly speculative development of autonomous driving technology. The company’s share price moved higher during the quarter after weakness in the year-to-date period.”
5. Advanced Micro Devices Inc (NASDAQ:AMD)
Number of Hedge Fund Investors: 107
David Nelson from Belpointe Asset Management in a latest program on Schwab Network mentioned some possible opportunities for Advanced Micro Devices Inc (NASDAQ:AMD) moving forward:
“I think there’s a place for Advanced Micro Devices Inc (NASDAQ:AMD). It’s probably on the inference side right now. It’s the training of large language models that has been, you know, quite necessary, and even the retraining of these models.
But as you broaden this out and all these companies use this, then you need inference where you’re actually processing a request, whether it’s a prediction or you’re performing a task. Advanced Micro Devices Inc (NASDAQ:AMD) could play, may play a role there.”
Advanced Micro Devices (NASDAQ:AMD) bulls believe the market should stop comparing the company’s chips with Nvidia and focus on its data-center growth and its competitive edge over other players like Intel. Advanced Micro Devices (NASDAQ:AMD)’s strong growth in the data center segment is indeed impressive, driven by Instinct GPU shipments and strong sales of EPYC CPUs. Advanced Micro Devices (NASDAQ:AMD) will continue to benefit from organic growth catalysts in this segment despite the competition from Nvidia. According to Goldman Sachs Research, global data center demand could surge by 160% by 2030. In the U.S., data centers are projected to use 8% of total power by 2030, up from 3% in 2022. McKinsey estimates that adding the required U.S. capacity will need over $500 billion in infrastructure investment by the decade’s end.
Rogue Funds stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q3 2024 investor letter:
“We sold our Advanced Micro Devices, Inc. (NASDAQ:AMD) puts for a sold profit after the Japan Carry Trade caused volatility to spike considerably and allowed for a significant increase in the value of our put options. I felt that was an ideal time to capture these profits which has turned out to be a good choice in hindsight.”
4. Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Fund Investors: 160
Michael Khouw, Co-Founder and Chief Strategist of OpenInterest.PRO, said in a latest program on CNBC that Alphabet (NASDAQ:GOOG) is undervalued.
“Alphabet deserves a market multiple more than the market does at 25 times. That would be 20% upside from here. I like Alphabet Inc Class C (NASDAQ:GOOG),” he said.
The market has been ignoring Alphabet Inc (NASDAQ:GOOGL)’s key secondary businesses and the stock remains undervalued despite concerns around AI search and regulatory onslaught.
Alphabet Inc (NASDAQ:GOOGL)’s secondary ventures in AI, autonomous driving, and other areas are making solid progress, especially in the Waymo robotaxi segment. With the 2025 EPS forecast at around $9, Alphabet (NASDAQ:GOOGL) could realistically achieve earnings closer to $10 if it maintains its historical outperformance rate. At a projected $10 EPS, Google’s forward P/E multiple would be approximately 17, a relatively low valuation for a diversified market leader.
What are the key drivers for Alphabet (NASDAQ:GOOGL)?
Alphabet Inc (NASDAQ:GOOGL) remains on track to reach a $100 billion revenue run rate from YouTube Ads and Google Cloud by the end of 2024. In its autonomous driving division, Waymo has shown notable progress, with paid autonomous rides growing 200% quarter-over-quarter to 150,000 weekly rides as of late October, thanks to a fleet of 700 vehicles in service since August.
This growth is significant: Waymo vehicles now average about 30.6 autonomous rides per day—substantially higher than Uber’s average of 4.18 rides per driver daily, based on Uber’s 31 million daily trips and 7.4 million drivers last quarter. This performance underscores Waymo’s competitive edge in autonomous ride volume compared to traditional ride-hailing.
In the third quarter, Alphabet Inc (NASDAQ:GOOGL)’s Search & Other segment saw a 12.2% year-over-year revenue increase, rising from $44.03 billion to $49.39 billion. YouTube advertising also performed well, with revenue up 12.2% to $8.92 billion from $7.95 billion. Meanwhile, Alphabet Inc (NASDAQ:GOOGL)’s subscriptions, platforms, and devices revenue grew even more sharply, surging 27.8% from $8.34 billion to $10.66 billion.
Google Cloud has been expanding steadily, with revenue climbing from $13.06 billion in 2020 to $33.09 billion in 2023. Notably, Google Cloud turned profitable for the first time in 2023, posting $1.72 billion in operating profit—a significant improvement from a $5.61 billion loss in 2020. This segment’s performance continues to strengthen, with the latest quarterly revenue reaching $11.35 billion, up 35% from $8.41 billion in the same period last year.
RiverPark Large Growth Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG): Google was our top detractor in the third quarter despite reporting second quarter results that were generally in line with expectations. The company reported slightly better revenue growth in Search, which grew 14% and continues to be resilient in the face of AI challengers, and Google Cloud, which grew 29% in the quarter. Service operating income margins of 40% and Cloud operating income margins of 11% were also both ahead of investors’ expectations as management’s cost-efficiency efforts drove operating leverage. YouTube revenue growth was slightly below expectations (+13% v. +16%) driven by tougher year-over-year comparisons and some general weakness in the Brand Advertising vertical. Finally, Cap Ex in the quarter of $13.2 billion was more than expected and likely the driver of the weakness in the stock as investors grapple with how much infrastructure investment will be required to achieve Google’s AI goals.
With its high margin business model (44% EBITDA margins last quarter), continued strength across its core Search and YouTube franchises, and continued growth and expanding profitability in its still relatively small Cloud business, we continue to view Alphabet as among the best-positioned secular growth franchises in the market. Additionally, GOOG shares trade at a compelling 19.5x the Street’s 2025 EPS estimate, a discount to the Russell 1000 Growth Index.”
3. Uber Technologies Inc (NYSE:UBER)
Number of Hedge Fund Investors: 136
Joshua Brown, the co-founder and CEO of Ritholtz Wealth Management, made the case for Uber Technologies Inc (NYSE:UBER) in a latest program on CNBC. He thinks it’s “ridiculous” to sell the stock because of the robotaxi threat. He thinks robo taxis would boost Uber’s business:
“This is the most mispriced stock in all of large cap tech. I know it’s not a tech stock by taxonomy. I know it’s considered a transportation. I cannot believe the ridiculous idea that this company’s cash flows are going to be affected by Robo taxis that are not on the road from Tesla. But that’s kind of what happened.
I think everyone understands that autonomous is the future. If you’re sitting at Uber Technologies Inc (NYSE:UBER) right now, all you’re doing is rubbing your hands together. I can’t wait. The single biggest problem for Uber is capacity. They don’t have enough rides in order to do this the way that they really want to do this.
So, if there are autonomous vehicles in cities all over America, those can be aggregated into the Uber app. Uber Technologies Inc (NYSE:UBER) is currently working on a pilot with Weo in the cities of Austin and Atlanta, where the Weo cars will be included as an option into the Uber app.
Uber is going to be the demand aggregator for the autonomous age. People selling the stock because they think it’s like a roadkill because of the Cyber taxi or whatever, they completely miss the story.”
RiverPark Large Growth Fund stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its first quarter 2024 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 4Q23 earnings and 1Q24 guidance. Gross bookings of $37.6 billion were up 22% year over year. Mobility gross bookings of $19.3 billion grew 29% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $17 billion were up 19% from last year and continued to be strong throughout the quarter. 4Q Adjusted EBITDA of $1.3 billion, up $618 million year over year, was better than management’s guidance of $1.2 billion, and the company generated $768 million of free cash flow, up from a cash loss of $303 million last year. Management guided to continuing growth in 1Q Gross Bookings (20% growth) and Adjusted EBITDA (of $1.3 billion). The company hosted a well-received analyst day in February during which it guided to three year compounded annual growth rates for gross bookings of mid-to-high single digits and EBITDA of 30-40%, both above investor expectations. The company also guided to free cash flow conversion of 90% of EBITDA.
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.4 billion of unrestricted cash and $4.8 billion of investments, the company today has an enterprise value of $165 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”
2. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 193
Will Rhind from GraniteShares said while talking to Schwab Network that he believes NVIDIA Corp (NASDAQ:NVDA) has almost no competition and the company has a bright future ahead.
“NVIDIA Corp (NASDAQ:NVDA) continues to be the market leader in AI. Its position really is so far out in front that it’s difficult to foresee any credible competitor in the short to medium term.
That is why, as David made reference to just then, there has been some interference from the US government, the French government, and now the Chinese government inquiring about sort of monopolistic-type practices because their position is so advanced.
I think that the future for NVIDIA Corp (NASDAQ:NVDA) next year is actually very bright. I think that we’ll find a way past these sorts of investigations, especially with, you know, Musk, his involvement with the Trump administration. And I think we see a $4 trillion-plus market cap for NVIDIA Corp (NASDAQ:NVDA) next year.”
Simply beating earnings estimates is not enough for NVIDIA Corporation (NASDAQ:NVDA) anymore, and the impact of high expectations will continue to weigh on the stock as growth cools.
An EPS surprise of 8.5% was not able to help the stock in the most recent earnings. A similar trend occurred following the second-quarter earnings after a 5.6% EPS surprise. It’s difficult to see Nvidia maintaining a mid-70s gross margin by the end of 2026. Over the last two quarters, Nvidia has already reported a drop in its gross margin from 78% to 74.5%.
Then there’s competition. Amazon (AMZN) recently disclosed its Trainium 3 chip, which is set to be released by the end of 2025. The chip is expected to be twice as fast with 40% more power efficiency than the previous generation, manufactured on TSMC’s (TSM) cutting-edge N3 technology. Reportedly, technology giant Apple (AAPL) will be a consumer of Amazon’s new silicon.
Manole Capital Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“As of this publication, Nvidia is up roughly 150% year-to-date. NVIDIA Corporation (NASDAQ:NVDA) was the largest gainer in the S&P 500 last year and has more than tripled in value over the last year. It hit an eye-opening market capitalization of $3 trillion in June, less than four months after it eclipsed the $2 trillion mark. Enthusiasm for everything AI-related, especially for the primary chip maker whose products are essential to powering AI technology, continues to fuel the market. Last quarter, and for the fifth consecutive quarter, Nvidia reported sales and profits that blew past Wall Street expectations. The stock rose +37% in the second quarter alone.”
1. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms (NASDAQ:META) recently jumped on reports the company’s new large language model surpasses rivals.
” Meta Platforms Inc (NASDAQ:META) indicated that Llama 3.3 70B model outperformed Google’s (NASDAQ:GOOG)(NASDAQ:GOOGL) Gemini 1.5 Pro, GPT-40, and Amazon’s (NASDAQ:AMZN) Nova Pro on several benchmarks,” said BofA Securities analysts, led by Justin Post, in a note to investors. “The new Llama model is open-source for most developers, but those with more than 700 million monthly users must request a license from Meta Platforms Inc (NASDAQ:META).”
Meta Platforms (NASDAQ:META) is driving usage and ads revenue by improving its algorithms and user experience thanks to AI. Meta also reported strong adoption of its Llama AI model, attracting over 500 million monthly active users across its platforms. This progress positions Meta well for robust profitability in the next two years as it scales its AI infrastructure.
Meta Platforms (NASDAQ:META)’s advancements in Reels and WhatsApp are helping manage CapEx growth as the company strives to stay competitive in AI.
Meta Platforms (NASDAQ:META)’s clear monetization strategy for its generative AI, especially with Llama3, makes it a strong contender against rivals like OpenAI’s ChatGPT. Meta Platforms (NASDAQ:META)’s substantial user base of 3.3 billion provides a data and distribution edge that could capture a significant share of the GenAI market. Although short-term investors may be concerned about Meta Platforms (NASDAQ:META)’s increased AI spending, its forward P/E ratio of 24x, based on FY 2025 EPS estimates of $24.62, makes it the second-most affordable big tech stock, after Google, within its peer group (Apple, Amazon, Microsoft, and Google).
Hardman Johnston Global Equity stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q3 2024 investor letter:
“During the quarter, we initiated one new position in Meta Platforms, Inc. (NASDAQ:META) and had no liquidations. Management at Meta has effectively addressed concerns about investment efficiency by shifting resources from Reality Labs towards broader AI initiatives with a clearer path to profitability. We believe management has successfully articulated the benefits of this strategy, highlighting how AI is driving user engagement and advertiser productivity. This, in turn, fuels continued revenue momentum and increases the likelihood of positive earnings surprises in the future. Additionally, the parent company of the social media platform, Facebook, has recently taken positive steps to enhance safety, which suggests to us a shift towards a more proactive and responsive approach to addressing important potential challenges and concerns. Weak oversight over data privacy protection was a key reason why we sold the position in the portfolio back in 2021. Removing this governance overhang allows us to feel comfortable to enter back into the stock at a time when we believe it is poised for strong earnings growth going forward.”
While we acknowledge the potential of Meta Platforms, Inc. (NASDAQ:META), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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