ChatGPT Stock Advice: 10 Recent Stock Recommendations

3. Meta Platforms Inc (NASDAQ:META)

Number of Hedge Fund Holders: 219

Meta Platforms Inc. (NASDAQ: META) recently exceeded analyst expectations in its latest quarterly earnings, signaling that its significant investment in AI is beginning to pay off and could lead to even more positive outcomes in the future. In response, Citi expressed an “incrementally positive” outlook on Meta’s shares, citing improved user engagement, monetization, and expanding profit margins. As a result, Citi raised its price target for META from $550 to $580.

JPMorgan also highlighted the benefits of AI for Meta Platforms Inc. (NASDAQ: META) at three key levels: enhancements to its core Family of Apps (FoA), new opportunities and user experiences, and the scaling of the Metaverse. Consequently, JPMorgan raised its price target for META from $480 to $610. Additionally, Morgan Stanley praised Meta’s advancements in its recommendation systems and overall quality through AI improvements.

While the market has been cautious about Meta’s substantial AI spending, the company aims to leverage AI to enhance user interactions, improve engagement, and better monetize its vast user base of 3.2 billion daily active users. With a robust free cash flow margin of around 30%, Meta Platforms Inc. (NASDAQ: META) is on track to generate $50 billion in free cash flow this year, which would place the stock at approximately 26 times this year’s free cash flow. If this growth continues, Meta could achieve $58 billion in free cash flow by next year, reducing the stock’s valuation to 21 times next year’s free cash flow.

With a strong financial position, including $35 billion in net cash, a massive user base, and a leading role in the AI-driven consumer market, Meta Platforms Inc. (NASDAQ: META) is positioned as a solid long-term investment opportunity.