10 Stocks That Will Benefit From AI

3. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders In Q3 2024: 235

Meta Platforms, Inc. (NASDAQ:META) is the parent company of Facebook, Instagram, and WhatsApp. Its dominance in the social media industry is primarily through Facebook, its social network with 3.2 billion users. The user base forms the backbone of Meta Platforms, Inc. (NASDAQ:META)’s revenue since the firm earns money by working with advertisers. The wide moat it enjoys in its industry has enabled the firm to amass sizable resources as is evident through its cash and equivalents of $41 billion. Meta Platforms, Inc. (NASDAQ:META) has used its resources to establish a foothold in the AI industry by ordering NVIDIA’s GPUs and creating the Llama foundational AI model. Through these, it is providing AI-driven experiences to advertisers and users in the hopes of monetizing the technology. Consequently, AI monetization and additional capital expenditure for AI will drive Meta Platforms, Inc. (NASDAQ:META)’s hypothesis moving forward.

Polen Capital mentioned Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter. Here is what the fund said:

“Meta Platforms delivered robust results in the period, with revenue growth accelerating in the first quarter. However, revenue comparisons for Meta will become more difficult from here, and its guidance for 2Q revenue fell below market expectations. After the company’s “year of efficiency,” where it cut costs in its core business, management is now indicating another ramp-up in GenAI and metaverse spending, spurring concerns about future profit margins. Metaverse spending, by our calculations, is now over $20 billion per year with little to no expected return on the foreseeable horizon.”