We recently published a list of 10 AI Stocks That Will Skyrocket. In this article, we’ll take a look at where Meta Platforms Inc (NASDAQ:META) stands in relation to other AI stocks that are set to skyrocket.
Some investors are closely scrutinizing Big Tech’s spending on AI. Despite this significant spending, Big Tech has enjoyed solid revenue and profit growth. Yung-Yu Ma, Chief Investment Officer at BMO Wealth Management, recently joined Yahoo Finance to shed light on the overall outlook for the AI sector through 2024.
Ma believes that companies are increasing their investments in AI in anticipation of higher returns. He said it makes sense that the market is less enthusiastic about this situation. Ma argued that while AI spending is likely to increase, it is certain that the results will be seen soon, perhaps by the end of 2025.
He added that the market will likely see healthy earnings growth in 2025. Spending will largely drive these earnings, especially AI and its various use cases such as data centers, power grids and other infrastructure. He expects overall valuation growth and said Big Tech is extremely confident and committed to investing in the sector.
2024 has been quite the year for artificial intelligence. Existing startups like Anthropic and Databricks have performed exceptionally well and transformed the industry.
Anthropic is an AI security and research company behind OpenAI rival Claude. On November 24, Anthropic expanded its partnership with AWS, involving an additional investment of $4 billion, bringing the total to $8 billion. The partnership also positions AWS as Anthropic’s primary cloud and training partner. Continuing this partnership, on December 4, Anthropic began optimizing Claude models to run on AWS Trainium 2.
Databricks, the data and AI company, is another AI startup crucial to the AI revolution. Some of Databricks’ products include data management solutions, data warehousing, real-time analytics, data sharing and data governance. The company reaches new heights. On November 6, the company partnered with KT Corporation to drive data and AI innovation in Korea. Following the trend, on November 20, Databricks announced 70% annualized growth in its French business and opened a new office in central Paris.
To suggest AI stocks that will skyrocket, we looked at media reports to select stocks that are expected to perform exceptionally well according to analysts and strategists. After viewing 10 similar rankings across the internet, we looked at each stock’s upside potential and selected those with the highest upside potential, as of December 3, 2024. Our list is ranked in ascending order of the street’s upside potential as of December 3, 2024. 2024. We also mentioned hedge fund sentiment for each stock.
Why are we interested in stocks that hedge funds are piling into? The reason is simple: our research has shown that we can outperform the market by imitating the stocks selected by the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Meta Platforms Inc (META): AI Innovations Drive Future Growth
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Street High Upside as of December 3, 2024: 37%
Number of hedge fund holders: 235
Meta Platforms Inc (NASDAQ:META) is the technology conglomerate behind Facebook, Instagram, Threads and WhatsApp, with more than 3 billion daily active users across all of its platforms. In recent months, the company has leveraged its expertise in AI and augmented reality, launching its first AR glasses, Orion, and mixed reality headset, Meta Quest 36, in September.
The company uses artificial intelligence to simplify everyday tasks and help solve critical tasks at the state level. On November 4, Meta Platforms Inc (NASDAQ: META) announced that it was making Llama available to government agencies in the United States. In addition to this, on November 20, the company introduced AI backgrounds and several other features for Messenger calls, also ensuring its customers have a more entertaining social media experience.
Overall, Meta Platforms Inc (NASDAQ:META) has a strong business model with a significant growth trajectory. The company is a pioneer in artificial intelligence and is expected to spend billions to achieve this goal. Analysts are also bullish on the stock and their high price target suggests a 37% upside from current levels.
Rowan Street Capital said the following regarding Meta Platforms, Inc. (NASDAQ: META) during its second quarter 2024. investor letter:
“We are pleased to announce that Metaplatforms, Inc. (NASDAQ:META), our largest holding in the fund, has performed remarkably, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. action. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, which equates to a 20% annualized return.
Overall, META ranks 10th on our list of AI stocks that will soar. While we recognize META’s growth potential, our conviction lies in the belief that certain AI stocks hold more promise in terms of higher returns in a shorter time frame. If you’re looking for an AI stock that’s more promising than META but is trading at less than 5x earnings, check out our report oncheapest AI stock.
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