Fund manager David Tepper increased his stake in the Meta Platform in the first quarter.
The company's AI-related work is already producing results, but the best work is not yet here.
The Meta platform could beat the market in the next five years, even if it faces some obstacles.
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The artificial intelligence (AI) market continues to grow rapidly. As many companies compete for supreme competition in the field, investors have many options today. It's not a bad idea to find inspiration names on Wall Street. Consider David Tepper, billionaire founder of hedge fund Appaloosa Management.
In the first quarter, Tepper and his team reduced the fund's stake in several high-profile AI players, including Amazon,,,,, Microsoftand Nvidia. Meanwhile, in Facebook's parent company, Meta Platform (Nasdaq: RMB)increasing during this period. That's why investors looking to cash in on AI should follow Tepper's lead and buy stocks on the Meta platform.
The Meta platform's work in AI has had an impact on its financial performance. The company has successfully expanded engagement in its social media websites and application suites by leveraging AI-driven algorithms. As its massive ecosystem of daily active users continues to deepen, advertisers are increasingly looking for it to put ads in front of their target audience.
This means higher advertising revenue, the bread and butter of the meta platform. However, the company's most important work in AI is likely to be located elsewhere. The Meta platform has developed and released a completely free language model (LLM) (LLM) Llama. This decision seems to be a head grab. But Mark Zuckerberg, founder and CEO of Meta Platforms, explains the importance of this open source model.
The company aims to attract talented AI developers to work as it is free and easy to modify and ultimately makes it the leading LLM on the market. The Meta platform is taking an almost democratic approach that it believes will produce tangible results as soon as possible, rather than later. Llama Powers Meta AI, AI Virtual Assistant. As the company works, it will be able to use AI in more ways to promote its user base and engagement.
On the other side of the business equation, it will enable businesses to launch more targeted, cost-effective advertising. We are still in the early stages of the Meta Platforms AI revolution, and the company is not paying anything. It plans to invest hundreds of millions of dollars in AI infrastructure in the next few years.
The current market value of the Meta Platform is US$1.6 trillion. It will need to record a CAGR of 13.4% over the next five years to become a $3 trillion company. This goes far beyond the long-term historical returns of the market. Additionally, it may experience severe headwinds during this period. President Donald Trump's trade policy is scaring investors. Some people are worried that this will lead to an economic downturn, which will affect the business of the metaplatform.
When economic tanks, companies tend to reduce their advertising budgets. Therefore, the trajectory of the metaplatform does not look like a straight line in the next five years. But as more AI efforts involve the rest of the business, the company can still provide the returns needed to join the highly exclusive ranking of $3 trillion stock. Even due to economic problems, income and income should maintain their upward trajectory.
Elsewhere, the metaplatform will continue to add new monetization opportunities. The company's large user base proposes many potential growth avenues. One thing it has been working on over the past few years is business news on WhatsApp. There will be others. Compared with advertising revenue, the revenue from meta-platforms outside of advertising is almost meaningless. But don't torture other opportunities. Finally, the stocks of the Yuan Platform do not look expensive.
The company's vision value is 25.2 higher than the average of 18.9 for the communications services sector, but the meta platform deserves a premium. Stocks still have plenty of room to rise, and it could become one of the rare $3 trillion stocks over the next five years. This is still a good time to invest in a company.
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John Mackey, former CEO of Amazon's subsidiary Whole Foods Market, is a member of the board of directors of Motley Fool. Randi Zuckerberg is a sister of former marketing development director, Facebook spokesperson, and Meta Platform CEO Mark Zuckerberg, and a member of the Motley Fools’ board of directors. Prosper Junior Bakiny has positions on Amazon, Metaplatform and NVIDIA. Motley fool has a place and recommends Amazon, metaplatform, Microsoft and Nvidia. Motley Fools suggest the following options: January 1, 2026, Microsoft $395 Phone, Short January 2026, Microsoft $405 Phone. Motley Fool has a disclosure policy.
Billionaire David Tepper buys more shares in artificial intelligence (AI) that can join Apple, Microsoft and Nvidia’s $3 trillion club by 2030, originally published by Motley Fool