Since Openai released a chatgpt for the world on November 30, 2022, Shares of Semiconductor Powerhouse Nvidia (Nasdaq: nvda) 818% (till 26 June) has increased. In that second way, in the last two and a half years, the market capitalization of Nvidia moved from $ 345 billion to $ 3.8 trillion. Making it World’s largest company As measured by market cap.
Some investors are already wondering who will be the next breakout candidate in Artificial Intelligence (AI) Revolution, pointing to another chip stock – probably Advanced micro equipmentAbout Broadcom Or Taiwan semiconductor manufacturingWhile each of these companies benefit from the growing AI infrastructure expenses over the next several years, I see another business that is better as “next Nvidia”.
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You see, Meta platform (Nasdaq: Meta) In the last few years, AI has been investing in AI, and those who are developing technologies, can change the Meta’s social media empire and create a status of stock for better gains on competition.
Image Source: Getty Image.
How can AI change the ecosystem of meta?
The meta operates in two main segments: advertising and reality labs.
Reality Labs Meta Metavars represent ambitions, including virtual reality interactions, gaming and consumer wearbals. While reality labs are benefited from AI, this section of the company remains unprofitable and has only a long -term point of view to transform the meta into something beyond a social media platform.
The main source of revenue and profits for meta comes from advertising – in particular, advertisements that appear in the company’s social media platforms: Facebook, Instagram and WhatsApp. It is the field of business that is mature to disintegration for the power of AI.
If you have ever scrolled on Meta’s social media app, there is a possibility that you have been bombing with a series of advertisements. However, how many of them really appealed to you?
As the meta user algorithm has been in sophisticated past, my hump is that you still receive posting or notifications for materials, goods and services that are not high interest for you. By taking advantage of AI, however, Meta can improve its data workload as it is related to user engagement and consumer behavior. As a result, the company can improve its future analysis in better positioning more relevant and customized listing for its users.
In return, the advertiser, who may be somewhat unexpected and will demonstrate cyclic budget strategies, More willing to allocate funds in various platforms of metaAdvertisers get an opportunity to provide employment to meta by keeping them sticky to the ecosystem. Pricing power Rose in competition and its revenue growth. At the same time, improving Ad feed for your users can also help the meta from the perspective of the cost structure – because the unit economics on click and customer acquisition should be reduced over time.
Conjunction with speeding up revenue and lower costs can lead to expansion of meaningful benefits for meta in the long run.
What can it mean for the evaluation of meta?
Since the release of CHATGPT, Meta’s share prices have increased by more than 500%. I bring it to clarify that Meta has also benefited from AI trade rapidly in the last few years.
Data by Ycharts.
However, Meta, except a notable spike during the first half of 2023, Price-to-i (P/E) Many have been quite consistent in many last 18 months.
This mobility suggests some ideas. First of all, relative generalization in Meta’s P/E means that investors feel that the company’s earnings profile is maturing. Furthermore, while a P/E of 28 is not at all cheap, this assessment is clearly a stable discount based on pre -levels.
Meta is creating a position to give itself a meaningful boost in profitability as AI is more integrated into its ecosystem. For this reason, Evaluation qualities of meta may expand In the coming years, the company comes into consideration as the “Nvidia Moment” of the company. This suggests that the company is meaningful than the current levels.
Is Meta Stock Buying Now?
I think Meta is a No-Brener when it comes to Magcap AI Stock. The above evaluation analysis shows that the meta stock still trades at a reasonable price point despite a generous return in the AI revolution. Furthermore, I think the company is still in the early stages of its AI development, and investors are still unlikely that these investments can yield yield for meta in a long time.
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Randy Zuckerberg, former director of Market Development and spokesperson for Facebook and sister of Meta Platform CEO Mark Zuckerberg, is a member of the board of directors. Adam spatocha Meta is the position in platforms and Nvidia. Motley flowers recommend advanced micro devices, meta platforms, NVidia and Taiwan semicondia manufacturing. Micter flowers recommend Broadcom. Motley is near the flower Disclosure policy,
The idea and opinion expressed here are the idea and opinion of the author and not necessarily Nasdac, Inc.
